Chapter 7 (United States Bankruptcy Code)

Chapter 7 of the United States Bankruptcy Code is a legal process that allows individuals or businesses to eliminate most of their debts. It involves the liquidation of non-exempt assets, which are sold off to pay creditors. Once the process is completed, individuals can receive a “discharge” of their debts, meaning they are no longer legally required to pay them. This option is often suitable for those in severe financial distress who do not have the means to repay their debts, providing a fresh start. However, not all debts can be discharged, such as certain taxes and student loans.