Chapter 7 Bankruptcy is a type of bankruptcy in which a person's assets are liquidated (collected and sold). The proceeds of the Chapter 7 Bankruptcy are distributed to the creditors. Definition from http://lawyers.alloptions.com/legal-glossary.asp

Chapter 7 Bankruptcy is a form of bankruptcy that involves total liquidation of assets. Also called "straight bankruptcy." Definition from http://www.nuestracdc.org/Mortgage%20Terminology.html