Chapter 7 Bankruptcy is also referred to as a liquidation bankruptcy. It can be used by businesses, but is primarily used by individuals.
The reason that a Chapter 7 Bankruptcy is referred to as a liquidation bankruptcy is that some of the debtor's (the person filing bankruptcy) property could be sold, or liquidated, to repay their creditors. Property will not necessarily be sold in a Chapter 7 Bankruptcy. However, considering it is possible, it is important to consult with a professional to determine if Bankruptcy is an option, and what type of Bankruptcy is the best option for you. Read more here about the liquidation of property and the exemptions used in Bankruptcy.
Not everyone can file a Chapter 7 Bankruptcy. There are income restrictions regarding who is eligible to file. For example, if a debtor makes enough money to repay part or all of their debts, they may have to file a Chapter 13 Bankruptcy.
Additionally, not all debts are dischargeable in a Chapter 7 Bankruptcy, so it could be beneficial to file a Chapter 13 Bankruptcy. For more information please read What happens to my debts if I file Bankruptcy?