Escalating personal debt, unrepayable credit card bills and constant creditor calls may lead some Californians to think about their options for debt relief. For some people, personal bankruptcy can be an important way to work toward a new financial future. There are two major types of personal bankruptcy filings: Chapter 7 and Chapter 13. When choosing the right type of bankruptcy, debtors can benefit from asking certain key questions to determine which option may work best for their circumstances.

People who may be vulnerable to wage garnishment or creditor confiscation of their property may wish to turn to Chapter 7 bankruptcy in order to protect their property. It is a relatively short process and can lead to the cancellation of most debts stemming from credit cards, unsecured loans or similar items. On the other hand, other types of debt are not dischargeable in bankruptcy. In general, student loans cannot be discharged unless the debtor can meet a very high barrier for undue hardship. In addition, alimony, child support, tax debts and court-ordered restitution payments after a DUI cannot be eliminated by filing for bankruptcy.

It is also important to examine a person’s property when deciding which type of bankruptcy is best for their situation. Items like cash, bank accounts, investment funds and valuable collections will often need to be surrendered to cover some repayments during the Chapter 7 bankruptcy process. While these filers can retain some types of essential property, those who want to retain other assets may wish to consider Chapter 13 instead.

An individual who is looking for new ways to escape from mounting debt and creditor harassment may wish to consider personal bankruptcy. A bankruptcy lawyer can advise a client about their choices and how they can help to achieve debt relief.