Can You File for Bankruptcy if You’re Unemployed?

Riverside, AL–If you’re currently unemployed and looking to file for bankruptcy in Alabama, you may still be able to do so depending on the type you choose to file for. Chapter 7 and 13 bankruptcy are the two most common types of bankruptcy individuals file for so we’ll explore how being unemployed can impact your chances of qualifying for both.

Filing for Chapter 7 bankruptcy when unemployed

Anyone who is looking to get most, if not all of their debt wiped away in order to get a fresh slate to work with will want to consider filing for Chapter 7 bankruptcy.

Under Chapter 7 bankruptcy protection, a debtor is able to use the assets they have (if any) to repay their creditors. Certain types of property such as your home and vehicle are usually exempt from liquidation, allowing you to still have a place to live and transportation to help you find work.

Now, although you can file for Chapter 7 bankruptcy during the time you’re unemployed, your earnings from the previous six months from the time you decide to file will be used to determine whether you’re eligible or not. In order to qualify, your income, given you worked, must pass the means test.

The means test will compare the income you earned in the previous six months before applying to that of your state’s median income. If you held a job in the past six months, speak with a Riverside, AL bankruptcy attorney to find out if you qualify for Chapter 7 or if you should push your filing date up.

Can I file for Chapter 13 bankruptcy if I’m not working?

If you’re out of a job and want to file for Chapter 13 bankruptcy, there is a chance you won’t qualify. This is because Chapter 13 bankruptcy uses your income to determine how much you can repay your creditors each month.

While Chapter 13 bankruptcy can help you get some of your debt erased, it’s designed to help a debtor reorganize their debt and repay their creditors. Now, if you can prove that you’ll be able to pay your creditors according to the terms outlined in your Chapter 13 repayment plan, then the court may allow you to file for Chapter 13 bankruptcy.

Let a Riverside, AL bankruptcy attorney determine if you qualify for bankruptcy

If you’ve fallen deep into debt and are unemployed, bankruptcy may still be an option. If you’d like to discuss eligibility criteria or common bankruptcy questions with an experienced Alabama bankruptcy lawyer, contact Hill, Gossett, Kemp & Hufford, P.C. to schedule an appointment.

Have questions about this article or a legal concern? Call 800-672-3103.

Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.

Hill, Gossett, Kemp & Hufford, P.C. can be reached at:

Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com

Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500

Springville Office

6441 U.S. Highway 11