Questions to ask to determine whether Chapter 7 is viable option

When facing serious financial crises in Louisiana or elsewhere where filing for bankruptcy appears to be the best solution, it’s always good to have several debt relief options available. There are two main types of consumer bankruptcy, and one may prove a better option over another in a particular situation. Chapter 7 is known as a liquidation bankruptcy, while Chapter 13 is referred to as a debt reorganization. 

Most people considering Chapter 7 bankruptcy are currently at risk for creditors to take their property or garnish their wages. Since Chapter 7 typically involves liquidation of nonexempt assets, a person considering this type of debt relief will want to ascertain whether he or she stands to lose a particular asset in such a proceeding. The bankruptcy process protects filers by granting exemptions for specified assets at the state and federal levels. 

Certain debts may not be discharged through Chapter 7 bankruptcy. Such debts include court-ordered child support payments, most income taxes and many student loans. Also, if a filer currently owes compensation following personal injury litigation, such debts would also still exist. Accordingly, Chapter 7 may not be the best option in such cases.

The first consideration is to gain an understanding about potential bankruptcy solutions. This is certainly advisable before making a decision about the best option for achieving debt relief. An experienced Louisiana bankruptcy attorney can provide needed information and help decide whether Chapter 7 or Chapter 13 may be the best choice to help resolve a particular financial problem. He or she can also prepare and file the court documents and represent the client at every stage of the proceedings.

Source:, “Is Chapter 7 the Right Choice when Facing Bankruptcy?,” Meghan Carbary, accessed on Feb. 5, 2018