Being unemployed or having a drastic reduction in income is a common cause for people filing bankruptcy. Nearly two-thirds of Americans listed “job-related financial stress” as the major factor in filing bankruptcy.
The majority of us do not have sufficient savings to carry us through our rough financial times. We rely on credit cards and loans to pick up the slack when our income can no longer cover our bills and expenses.
Even if we are in a position to get unemployment benefits, few of us could survive without a steady paycheck for very long. If you don’t get a job or steady source of income soon, you may need to consider filing personal bankruptcy.
Chapter 7 bankruptcy can wipe away your debt and give you a fresh start. However, if you have no income and no job prospects at all, you may have to give up some of your assets, so your debtors can be satisfied. If you have enough exemptions, you may not lose anything during the bankruptcy process.
You probably will not be allowed to file Chapter 13 bankruptcy since you do not have an income to make back payments on your debt.
To file a Chapter 7 bankruptcy you must pass a means test, your income from the last six months will be used to determine if you made more or less than your states median income. If you are recently unemployed, it may be in your best interest, if you can, to wait a month or two so your income ratio will go down.
If you have suffered a job loss or a drastic reduction in your income, contact a Plano bankruptcy attorney to discuss what options you may have to get debt relief.