Contrary to popular belief, employment is not a requirement for filing for bankruptcy. The truth is that job loss is among the most popular reasons why people file for bankruptcy. While unemployment won’t disqualify you from filing for bankruptcy, it can have an effect on the outcome of your bankruptcy. In this blog, our Rancho Cucamonga bankruptcy attorney explains how being unemployed can impact a Chapter 7 and Chapter 13 bankruptcy.
Chapter 7 Bankruptcies
The main purpose of a Chapter 7 bankruptcy is to eliminate any unsecured debts – these typically include credit card debts and medical bills. Typically, these bankruptcies work for individuals who have low income with virtually no assets. Individuals who have an income that is below the median automatically qualify for a Chapter 7 bankruptcy. Because of this requirement, unemployment often makes it easier for you to be eligible to file for a Chapter 7 bankruptcy.
Chapter 13 Bankruptcies
Under Chapter 13 bankruptcies, the debtor is usually responsible for paying back all or a portion of what is owed. Unlike Chapter 7 bankruptcies, you may be able to rid yourself of a second mortgage in a Chapter 13 bankruptcy. Since Chapter 13 bankruptcies require a payment plan, this type of bankruptcy typically works best for individuals who are bringing in a regular income. Don’t let this stray you – even if you’re unemployed, you can still file for a Chapter 13 bankruptcy. Being unemployed usually means you’re collecting unemployment benefits that can be used to show that you’re bringing in enough money to fund your payment plan.
Nguyen Law Group has the skill and expertise necessary to greatly help your bankruptcy case. Our Rancho Cucamonga bankruptcy attorney is ready to discuss your debt relief options. Call (909) 328-6290 today to schedule a free consultation.