The economy isn’t always as good as it should be, and that can mean that many people go through layoffs or struggle to find work. In those cases, people who once had excellent jobs or debt that was under control may find that it’s nearly impossible to keep up with their payments. They may struggle to make ends meet and wonder if there is any way that they can get back in control over their finances.
If you are unemployed and are starting to miss payments, now may be an excellent time to look into bankruptcy. Chapter 7 or 13 bankruptcy will allow you to focus on getting your debts paid down or eliminated so that you can be in control of your money and get yourself back on track.
Which kind of bankruptcy is best when you don’t have a job?
Generally speaking, Chapter 13 bankruptcy is a “wage-earner’s plan,” which means that people who are employed may use this option. However, you could go through this kind of bankruptcy if you have enough disposable income to make payments. You may not qualify for Chapter 7 bankruptcy in all cases, so if you don’t, Chapter 13 could be the next option.
Chapter 7 bankruptcy may be a better choice for those without an income because it focuses on eliminating debt and does not require a payment plan. With Chapter 7 bankruptcy, you may need to give up some of your assets to have them liquidated, but there are exceptions and exemptions that will help you keep many of the assets you possess.
To qualify for Chapter 7 bankruptcy, you will need to complete a means test. If you earned a significant amount of money in the past prior to your job loss, you may find that it is hard to qualify. However, if you can wait a few months and still have no income, you may be able to qualify despite your past earnings.
Both kinds of bankruptcy could help you get out of debt and feel more secure financially, even if you have lost your job. Look into both options to determine if one may be right for you.