Chapter 7 eliminates your debts.  You can keep your car payment and your house, but eliminate your credit card and department store debts, as well as medical debts and, judgments and other types of debts.

In most cases, a Chapter 7 is referred to as a liquidation.  This is because the Bankruptcy Trustee has the option of liquidating or selling property of yours that is not exempt from your creditors.  In most cases, all, or almost all, of your property is exempt from.  In a Chapter 7 bankruptcy you avoid your debts, and keep your property, as permitted by the law.  In a Chapter 7 bankruptcy, you decide what debts you want to keep and which you want to avoid.