Chapter 7 bankruptcy, often referred to as liquidation bankruptcy, allows individuals to eliminate most of their unsecured debts such as credit cards and medical bills. The process involves selling non-exempt assets to pay creditors, but many filers can keep essential property. This type of bankruptcy can be a lifeline for those facing severe financial distress, offering a chance to start anew without the burden of overwhelming debt. It’s important to consult with a bankruptcy attorney to understand eligibility and the implications of filing.