What is the difference between chapter 7 and Chapter 12 bankruptcy?
Chapter 12 is reorganization, Chapter 7 is liquidation.
I'm pretty sure chapter 13 wipes the debt clean (except student loans, court rulings & tax debt). Chapter 7, I think, keeps all the debt, but makes the payment more manageable.
Chapter 7 is on liquidation while chapter 12 deals with adjustment of family debts. In chapter 7 everything is being scrapped to start over again. A trustee is appointed to sell the debtors assets. In chapter 12 a debtors do not need to sell their assets. Go to http://money.howstuffworks.com/personal-finance/debt-management/chapters-bankruptcy.htm, for more information.