Everything You Need to Know About Bankruptcy if You’re Unemployed

Filing for bankruptcy is a difficult decision to make. If you’re in need of debt relief, considering filing for bankruptcy, and are unemployed, there are a few important things you should know. Bankruptcy lawyers, Lewis & Jurnovoy, are explaining what you should know about the different types of bankruptcy and how being unemployed might affect which chapter of bankruptcy you file under.  

What is bankruptcy? 

Bankruptcy is a legal process that provides debt relief for individuals and businesses who can’t repay their debts. When you file for bankruptcy, an “automatic stay” goes into effect. This means that creditors can’t try to collect on your debts, at least temporarily.  

There are several types of bankruptcies, but the two most common are Chapter 7 and Chapter 13 bankruptcies.  

Chapter 7 Bankruptcy: Chapter 7 bankruptcy is also known as “liquidation bankruptcy.” With this type of bankruptcy, you may be able to wipe out some or all your debt. To qualify for Chapter 7 bankruptcy, you must pass the “means test.” This test looks at your income and compares it to the median income in your state. If your income is below the median income, you may be eligible for Chapter 7 bankruptcy.  

Chapter 13 Bankruptcy: Chapter 13 bankruptcy is also known as “reorganization bankruptcy.” With this type of bankruptcy, you create a repayment plan to repay all or part of your debt over a period of three to five years. In order to qualify for Chapter 13 bankruptcy, your debts must be below a certain amount, and you must have a regular source of income.  

Can I file for bankruptcy if I’m unemployed?  

The answer is yes, but it might not be the best option for you. If you don’t have any assets and don’t expect to have any income in the near future, Chapter 7 bankruptcy might not be the best option because there would be nothing for the trustee to sell to pay off your debts. In this case, Chapter 13 bankruptcy might be a better option because it doesn’t require that you have assets in order to qualify.  

Filing for bankruptcy is a difficult decision, but if you’re considering it or need Chapter 13 assistance, Lewis & Jurnovoy P.A. can guide you through this process and help you get the fresh start that you deserve.   

 

Lewis and Jurnovoy is a local law office serving the Florida Panhandle. We specialize in bankruptcy law, including Chapter 7 and Chapter 13 bankruptcy. We will work to achieve the best financial remedy for your outstanding debts. 

Lewis & Jurnovoy PCB 
2714 West 15th St 
Panama City, FL 32401 
(850) 913-9110 
https://www.LewisandJurnovoy.com