7. 1. The chapter of the United States Bankruptcy Code allowing a trustee to collect and liquidate a debtor’s nonexempt property, either voluntarily or by court order, to satisfy creditors. [Cases: Bankruptcy 2251. C.J.S. Bankruptcy § 50.]
2. A bankruptcy case filed under this chapter. • An individual debtor who undergoes this type of liquidation (the most common type of bankruptcy) usu. gets a fresh financial start by receiving a discharge of all debts.
— Also termed (in sense 2) straight bankruptcy; liquidation bankruptcy.
“A Chapter 7 case has five stages: (1) getting the debtor into bankruptcy court; (2) collecting the debtor’s property; (3) selling this property; (4) distributing the proceeds of the sale to creditors; and (5) determining whether the debtor is discharged from further liability to these creditors.” David G. Epstein et al., Bankruptcy § 1–7, at 9 (1993).
CHAPTER 9
Chapter
9. 1. The chapter of the United States Bankruptcy Code governing the adjustment of a municipality’s debts. [Cases: Bankruptcy 3481. C.J.S. Bankruptcy §§ 361–367.]
2. A bankruptcy case filed under this chapter.
