Allow users access to their own Files:
Manage > User Settings > Access to own Files. You can set to OFF, View Only, Upload Only, or View and Upload.
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For the Files tab on a user’s account, you can allow users to see their own files, and/or upload files. When view is allowed, you can still hide individual files.
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This does not allow the users to create new categories or edit files.
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Your users can access this by selecting their name in the far right corner > My Account > Files Tab.
Categories: If you no longer need a Category, remove all the files from that Category and it will be deleted.