Bankruptcy is a legal process where a Federal Court orders your creditors to forgive your debt or take payments on them. If a creditor violates the Federal court order, they get in trouble with the court. A court has more power than you do, and has the right to tell creditors what to do, even if they don't want to do it.
Chapter 7 Bankruptcy is a way to get most debts foregiven. The negative part of Chapter 7 is that not all debts are forgiven, such as child support, alimony, recent taxes, intentional wrongdooing, and student loans. Also, if some property is not protected by Federal "exemptions" a trustee might be able to sell it to make money for your creditors. Fortunately, New York now follows Federal exemptions, which are more generous than NY State exemptions.
Chapter 13 Bankruptcy Some people can't discharge their debts in Chapter 7, so Chapter 13 is a bankruptcy payout plan - usually over 5 years - that lets you keep your property while you pay something to your unsecured creditors. While you do pay money in, Chapter 13 has some strategic advantages, since you can do some things in Chapter 13 that you can't do in Chapter 7, such as modify the amount and terms of car loans.
Post-Discharge After your bankruptcy is over, your credit score will not be great for some time, but you can start rebuilding your credit immediately, which you couldn't do before. Also, if a creditor sells the debt or tries to collect after your discharge, they may have to pay YOU money.
Everyone has questions. Here are some general answers. This is not legal advice, just general information and does not create an attorney-client relationship.