What type of bankruptcy allows an individual to eliminate debt by selling all assets?

The correct choice is related to Chapter 7 bankruptcy, which is designed for individuals who want to eliminate their unsecured debts. Under this type of bankruptcy, a debtor's non-exempt assets are liquidated—meaning they are sold off to pay creditors. This process allows individuals to discharge most of their debts and provides a fresh start financially.

In Chapter 7, certain assets that are deemed necessary for living, such as basic household goods, are exempt from liquidation, thereby protecting them. However, any non-exempt assets can be sold by a bankruptcy trustee to pay off creditors. This is a crucial aspect of Chapter 7, as it focuses on the liquidation of assets to clear debts.

In contrast, Chapter 11 is often used by businesses to reorganize and restructure their debts while continuing operations, and Chapter 13 is aimed at individuals with a stable income who want to create a repayment plan to pay back their debts over time. Chapter 15 deals with cross-border insolvency issues and is not applicable in the context of individual debt elimination through asset liquidation. Thus, Chapter 7 stands unique in its capability to allow for the elimination of debts through asset sales.