In bankruptcy, consumers or businesses seek legal assistance when bills cannot be paid. There are different types of bankruptcies. In Chapter 7 bankruptcy, debts for an individual or household are discharged. In Chapter 13 bankruptcy, debts of an individual or household are restructured and repaid over three to five years, under bankruptcy court supervision. Chapter 11 bankruptcy allow businesses to restructure. Whatever the type, bankruptcy has a negative effect on the ability to borrow.