One of the worst things you can do if you are struggling with debt is make a drastic decision without first considering the financial implications. People can make some very serious — and expensive — mistakes when they do this and many people just end up in an even worse situation.

This is why you will want to carefully consider your debt relief options and examine your legal rights with an attorney before making a hasty decision. An attorney can help you figure out whether bankruptcy will be an effective solution and if so, which type of bankruptcy will be best for your situation.

Determining whether Chapter 7 or Chapter 13 bankruptcy is appropriate may be a bit more complicated than you realize, but you should not be discouraged. You can work with an attorney to ask yourself and answer some critical questions.

  • How much of your debt dischargeable?
  • Is it more important to see immediate relief or a long-term solution?
  • Are you earning enough money to keep up with repayment?
  • How much money do you have and how much do you owe?
  • Is keeping your home a priority? What about non-exempt property?

Once you can answer these and other questions, the decision between filing for Chapter 7 or Chapter 13 bankruptcy will typically become clearer.

Too often, unfortunately, people just make a decision without considering all the options and without having all the information. They may file for Chapter 7 because they just want their debt gone as soon as possible or opt for Chapter 13 just because they think they are prepared to stick with a repayment plan. But making decisions this way can lead to denied petitions and additional financial penalties for failing to comply with the terms of a bankruptcy plan.

It is certainly understandable that between the constant calls from creditors and the stress of unpaid bills, it can be very tempting to just make an impulsive decision in an attempt to get some breathing room. But rather than risk making a big mistake quickly, it can be wise to slow down, consider your debt relief options and work through the proper channels to resolve debt issues.