Chapter 7 CHAPTER 7 BANKRUPTCY: FOR LIQUIDATION Chapter 7 (liquidation bankruptcy) is the one of the most common types of bankruptcy for individuals (not businesses).Depending on the state that you are living in, there are various things you will not be forced to sell to complete this bankruptcy, but largely the liquidation of all of your assets and anything you own, of value, will be used by a court-appointed trustee to oversee the sale to be used to pay off your creditors. Free Consultation - Call 516-997-0999