Chapter 7 of the Bankruptcy Act is permitted when it would be highly unlikely that substantial repayment could ever be made.

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Chapter 7 of the Bankruptcy Act is commonly referred to as "liquidation" bankruptcy and is designed to provide relief to individuals or businesses that are struggling to repay their debts. This chapter is allowed when it is determined that the debtor's financial situation is such that it is highly unlikely that substantial repayment could ever be made. Under Chapter 7, a debtor's non-exempt assets are sold off to repay creditors, and most remaining debts are discharged.

Chapter 7 of the Bankruptcy Act Is Permitted When It