In a nutshell, the idea of Chapter 7 is that you are asking for bankruptcy protection from your creditors on the basis that you (a) do not make enough money to pay back the debts and (b) you do not have excess assets that can be sold to raise money to pay your creditors.  Of course, you are allowed deductions reasonably necessary for living (e.g. food, shelter, transportation, etc) from your income and you can also protect a limited amount of personal assets, both real and personal.  The essential idea, however, is that you should not be allowed to discharge your debts until it can be reasonably established that there are no assets available for distribution to creditors.  In order to make this determination, it’s necessary to have a complete and accurate picture of your financial situation.  For that reason, the bankruptcy petition includes a number of schedules requiring current and detailed information about your finances.  

For some people, chapter 7 is not an option.  Instead, they may have to file Chapter 13 to “reorganize” their finances.  Under Chapter 13, the debtor proposes to make monthly payments for a period of 3-5 years.  This payment plan may be necessary to pay off arrearages on mortgages or debts that are not dischargeable. The debtor’s income determines the length of repayment (3 or 5 years) as well as the amount of the monthly payment.  Depending on the particular circumstances of your situation, it may be more beneficial to file under Chapter 13.