Consumer Bankruptcy Law and Practice: 3.1 General Explanation of Chapter 7 Bankruptcy
When most people think of bankruptcy, they think of the type of bankruptcy provided for in chapter 7 of the Code—a liquidation proceeding sometimes called straight bankruptcy. This type of bankruptcy has by far been the most popular type of proceeding for individuals. Although the percentage of debtors choosing chapter 7 has diminished somewhat since enactment of the Code because of the advantages that chapter 13 offers, chapter 7 continues to be the chapter most frequently utilized, and it remains a lifeline for up to a million consumer debtors each year.