Unemployment and Bankruptcy

When people tell why they filed for bankruptcy, unemployment is often the number one reason given — layoffs and unemployment as being the primary factor of job-related financial stress. For most Americans, an interruption in income will create a pile of unpaid bills. We have been advised to have several months of savings for hard times; most of us do not heed this advice.

Unemployment Benefits

Sometimes we are lucky enough to have the safety net of unemployment benefits. The benefits won’t last for long, and often won’t be enough to cover your debt. Others who will not receive this benefit will start to experience financial stress sooner.

Bankruptcy

You probably won’t be able to pay your bills if you don’t have a reliable source of income. Creditors will soon be calling to attempt to get payments from you or threatening to seize your property. Filing bankruptcy can help save your assets and eliminate your unsecured debt such as credit cards, medical debt, personal loans, and some back taxes.

Automatic Stay

When you file bankruptcy, a protection you are given is called the automatic stay. The automatic stay legally bars your creditors from contacting you regarding your debt. All phone calls, letters, liens, repossessions, and evictions must stop during the bankruptcy process.

Chapter 7

Chapter 7, bankruptcy is the easiest and quickest form of bankruptcy. In as little as three to six months, you can have all of your qualifying debt discharged and no longer be legally obligated to pay on that debt.

Chapter 13

Chapter 13 is more for people with a regular income that can make back payments on their secured debt like a home or a car. If you have no income and no prospects on the horizon, you may end up losing your home or your vehicle during bankruptcy.

If you have experienced a job loss or cut back in your hours, contact a Dallas bankruptcy attorney to find out how you can save your assets and get financial relief.