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Chapter 7

CHAP-ter SEV-en
A form of bankruptcy in the United States that involves the liquidation of a debtor's nonexempt assets to pay off creditors. It is often referred to as "straight bankruptcy" and is typically used by individuals or businesses with limited income and assets.
After struggling to keep up with payments, the small business owner decided to file for Chapter 7 bankruptcy.
N/A (Many individual cases, not a single landmark example)
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Frequently Asked Questions

Nonexempt assets are sold, and the proceeds are used to pay off creditors.

Chapter 7 involves liquidation, while Chapter 13 involves a repayment plan.

Individuals, married couples, corporations, and partnerships can file for Chapter 7 bankruptcy.

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