Bankruptcy
Chapter 7 Bankruptcy
Chapter 7 is liquidation bankruptcy: a trustee sells whatever non-exempt property the debtor has, pays creditors from the proceeds, and most remaining debts are discharged.
For individuals, most cases are no-asset cases, meaning exemptions cover everything the debtor owns and creditors receive nothing. Eligibility is screened by a means test that compares income to the state median.
For businesses, Chapter 7 is the end. The company stops operating, the trustee sells the assets, and there is no discharge for a corporation, so the entity simply ceases to function.
For creditors, the first question is whether the case has assets. A no-asset notice means there is nothing to distribute and no reason to file a claim, and it explains why so many consumer bankruptcy dockets are only a few entries long.
How it appears on a docket
VOLUNTARY PETITION under Chapter 7 filed by Harbor Coastal Foods LLC. Trustee appointed. Section 341 meeting of creditors set for 3/18/2026.
Governing rule
11 U.S.C. ch. 7
Related terms
- Discharge — A discharge is the bankruptcy court order releasing the debtor from personal liability for most debts, so creditors can never collect them again.
- Trustee — A bankruptcy trustee is the person appointed to administer a bankruptcy estate: gathering assets, reviewing claims, and distributing money to creditors.
More on bankruptcy
See this term in a real case
Search federal court records and read the filings where chapter 7 bankruptcy actually shows up. New to federal dockets? Start with how to find a federal case.