When an individual becomes insolvent and he is rendered incapable of settling his debts, the government and the federal court processes still give him a legal remedy. This remedy is for the person to somehow be able to liquidate his debts through lawful proceedings. Bankruptcy is such solution that extends adjustment or a court guided payment scheme or even a total write off. There are two immediate remedies available namely chapter 7 and chapter 13. Chapter 7 bankruptcies entail dissolution of the debts you owe. On the other hand, Chapter 13 bankruptcies entail a court guided payment scheme that allows for scheduled settlement of the amount owed spread to say, three to five years. Sometimes, the total amount to be paid as per settlement is even lower than the original debt. Either way, should one be insolvent and planning on filing, legal advice is always best on figuring out which remedy to apply.