What is the primary purpose of Chapter 7 bankruptcy?

The primary purpose of Chapter 7 bankruptcy is indeed to allow individuals a fresh start by erasing most debts. This form of bankruptcy is designed to provide relief for debtors who are unable to repay their debts. When individuals file for Chapter 7, their non-exempt assets may be liquidated to pay creditors, but most of their unsecured debts, such as credit card debts and medical bills, can be discharged. This means that after completing the bankruptcy process, the individual is no longer held responsible for those debts, effectively providing them a clean slate to rebuild their financial life.

This option stands out because it encapsulates the fundamental goal of Chapter 7, which is financial rehabilitation for debtors. The other choices refer to different aspects or types of bankruptcy or debt management that do not align with the core objective of Chapter 7. For instance, restructuring payments over time is more associated with Chapter 13 bankruptcy, where individuals create a repayment plan. Similarly, repaying debts with accepted assets and preventing the accumulation of new debts do not accurately capture the essence of what Chapter 7 offers to debtors seeking relief from overwhelming financial burdens.