Tag Archives: Unemployment

Debtors who are unemployed and being hounded by creditors may benefit from filing for bankruptcy. This can allow people who are unemployed the opportunity to protect assets, discharge debts and temporarily freeze collection attempts. Depending on the circumstances, unemployed filers can benefit from Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy: Unemployed people may have an easier time filing for Chapter 7 bankruptcy. That is because to file for Chapter 7, a debtor must pass the means test, which compares his or her household income with the median state income for similar households. An unemployed person with more unsecured debts (medical bills, most credit cards) than secured debts (mortgage, vehicle) may benefit by filing for Chapter 7 bankruptcy. Chapter 13 bankruptcy: Depending on the circumstances, it may be possible for an unemployed person to file for Chapter 13 bankruptcy. People with secured debts may benefit the most from this…
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Difficult and seemingly unsolvable financial situations can arise from long periods of unemployment. In some cases, lack of income can fuel existing debts, whether it be medical bills, credit cards or student loans. Even though a person is unemployed, he or she can still file for bankruptcy. However, unemployment does affect how debtors can benefit from either Chapter 7 or Chapter 13 bankruptcy. Being unemployed can help when filing for Chapter 7 bankruptcy, as it is less likely the person will be required to take the means test. The means test, which is required to qualify for Chapter 7 bankruptcy, compares a debtor’s household income to state median. Additionally, Chapter 7 bankruptcy could discharge some of the unsecured debts weighing down unemployed individuals, such as some types of credit card debt and medical bills. Chapter 13 bankruptcy can be more difficult for unemployed individuals, as they may have greater difficulty…
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