BANKRUPTCY LAW:

Chapter  7:  Also known as pure bankruptcy or liquidation.

Chapter 13: A work out or court supervised restructuring of debt for individuals within certain limited financial parameters. Creditors must paid at least the same or more than they would receive under a Chapter  7.  Such plans may not extend over more than 5 years.

Chapter 11: A court supervised work out where the business or individual establishes a pay out plan to remain in business.

Chapter 12: Bankruptcy plans for farmers. 

Bankruptcy laws also protect creditors. If someone you, or someone you know is owed money by a bankrupt individual or business they should consult a competent bankruptcy to attorney to determine what they may do to protect their financial interest through filing notices of claim, objecting to a discharge or an adversary proceeding.