Even if you are overwhelmed with debt, Chapter 7 bankruptcy may not be the answer. Before you file, you have to assess the kind of debt you have to make sure it will actually be discharged in Chapter 7 bankruptcy. If you have certain tax debt or you have fallen behind in child support payments, then these will not get discharged under bankruptcy, for example. Read on for some things to consider before you actually take the step of filing for bankruptcy protection.

First of all, you will have to look into whether your most pressing debts can actually be discharged. If you have fallen severely behind in child support or alimony payments, you cannot get this debt discharged in bankruptcy. Ever. Not even a court can eliminate this debt for you. You may want to consult a lawyer, however, because if you file for bankruptcy, this might enable you to ask a court to modify support orders for the future. Other court fees that are non-dischargeable include fines that have imposed for drunk driving. More specifically, these are fines that are based on a drunk driving accident where someone was hurt or killed. If you have fallen behind on your income tax, then any of this debt that is less than three years old will not get discharged.

Student loans are another tricky debt to get discharged, as you would have to sufficiently prove that paying off these loans would create "undue hardship" for you. Most people are unable to do this, and thus most people will not be able to eliminate their student loan debt. Then there are luxury debts. If someone owes more than $650 to one creditor within that last 90 days before filing for bankruptcy, or if someone owes more than $925 in cash advances within 70 days of filing, then this debt is also non-dischargeable.

Then there are dischargeable debts that can become non-dischargeable if a creditor objects to the discharge. For example, a creditor can block someone's debt from getting wiped out if they fell into this debt through fraud. This could look like proving that that that person wrote a bad check or put down false information when applying for credit. If someone accumulated debt because of purposeful injury inflicted on someone else, or intentional damage to someone else's property, then this too could become non-dischargeable. Any debts incurred because of stealing, breach of trust, etc. might not be dischargeable either. Then even debts that are related to a divorce settlement, but that are not support payments, could still be blocked from discharge. This is not automatic, but if you really need to get this kind of debt discharged, you are going to have to rely on your creditors not objecting to it.

Also, do you have a cosigner (or co-debtor)? This could be a business partner, or someone else who cosigned your loan. If you file for bankruptcy, this debt might not get discharged. If the debt can get discharged, then this means that your co-debtor will now have full responsibility for the debt.

Understanding the type of debt you have is crucial to determining how helpful bankruptcy can actually be for you. Before you take this big step, it would be of great benefit to first consult with a bankruptcy lawyer. Perhaps you qualify for Chapter 13 bankruptcy, allowing you to get caught up on all your debt.

With a bankruptcy lawyer, you can figure out if Chapter 7 bankruptcy is the right step for you or not. If not, then with the help of someone who both fully understands finances and the law, you can come up with a viable alternative to finding a stronger financial future.