Final answer:
Chapter 7 bankruptcy (option c) is the type of bankruptcy in which a person is freed from most debts in exchange for giving creditors assets that legally may be seized. Non-exempt assets are liquidated to repay the debts, and once discharged, the person is no longer responsible for most of their debts.
Step-by-step explanation:
The type of bankruptcy in which a person is freed from most debts in exchange for giving creditors assets that legally may be seized is called Chapter 7 bankruptcy.
Chapter 7 bankruptcy, also known as liquidation bankruptcy, is a legal process in which a person's non-exempt assets are sold to repay their debts. Once the assets are liquidated and the debts are discharged, the person is no longer responsible for most of their debts.
For example, if someone files for Chapter 7 bankruptcy and they have a valuable piece of property that can be seized by creditors, it will be sold to repay the debts. However, certain assets, such as a person's primary home or necessary household items, may be exempt from liquidation.