A Chapter 7 bankruptcy is also known as a straight liquidation bankruptcy. Consumers often confuse this and falsely believe it means they have to liquidate or get rid of all their assets, like their house or car. In fact, it really means that it liquidates or wipes out all your debts! It's almost as if those debts never existed. In most cases, you are allowed to keep certain assets in exchange for wiping away those debts. This is the preferred type of bankruptcy for most people. That’s your fresh start bankruptcy! It let’s you start over, move on and get a fresh start after discharging your debts.