Chapter 7 Bankruptcy

Definition

A bankruptcy process where certain assets may be sold to pay debts, and most remaining debts are discharged. It gives a fresh start but affects your credit.

What to consider

See this as a final reset for overwhelming debt.
Be prepared for the impact on your credit score.
Know that while it offers a fresh start, rebuilding will take time.

Real world scenarios

Tony files Chapter 7 when credit card debt overwhelms his ability to keep up with payments. He chooses liquidation to start fresh.
Amy’s court process discharges most unsecured debts, but she understands some obligations like certain taxes remain.
After Chapter 7, Rex attends credit counseling sessions to avoid falling into unmanageable debt again.