When people in Houston struggle with excessive amounts of personal debt, they may turn to bankruptcy to find a new path to financial freedom. There are several factors that can help people determine whether filing for a Chapter 7 bankruptcy is the best option for their situation or if they should consider Chapter 13 or another approach.

People should look at their situation to help make their decisions about filing for Chapter 7 bankruptcy. In the first place, they should work to make sure that they will eliminate enough debt to make the choice worthwhile; for example, student loan debt is generally ineligible for discharge. They should also check to see whether they are at risk for wage garnishment or repossession if they do not file for bankruptcy.

People who may be vulnerable to wage garnishment or confiscation of their property may find it particularly important to file Chapter 7 bankruptcy. When people are ineligible for these types of creditor actions, they may still benefit from a bankruptcy filing, but it may be less critical. In addition to student loans, there are other types of debt that cannot be dealt with in personal bankruptcy. These include alimony, child support, tax debts, luxury items or drunk driving restitution payments. After filing for bankruptcy, people may need to give up some of their property, like expensive collections, securities or a second home. However, people can keep their necessities and personal benefits even after filing for Chapter 7.

There are a number of elements that can factor into the decision about which type of bankruptcy to pursue and when to file. By consulting with a bankruptcy attorney, people may learn more about how Chapter 7 bankruptcy can help them find debt relief.