Unemployment and Bankruptcy
Bankruptcy May Eliminate Debts if You're Out of Work
Unemployment is one of the largest factors driving millions of Americans into personal bankruptcy in recent years. Without a regular source of income, credit card bills, utility bills and mortgage payments become difficult to juggle.
And the situation is worse than the official employment rate. Millions more Americans have taken reduced hours or lower paying jobs just to try and make ends meet.
Bankruptcy laws provide federal protections that allow struggling individuals and families to walk away from some or all of their debts. If you're dealing with unmanageable debts, talk to a bankruptcy lawyer today about how to put these laws to work for you.
Bankruptcy Laws for the Unemployed
Bankruptcy laws designed to make it more difficult to walk away from debt actually favor those who have taken a major income loss.
That's because anyone filing Chapter 7 bankruptcy, in which credit card debts may be completely wiped out, must qualify under the Chapter 7 means test. To qualify, your household income must be under the median for your state and household size.
The means test looks at your income for the past six months (doubled for an annual income), so anyone who has been unemployed for more than a few months has a decent chance of qualifying.
Learn more about the means test and bankruptcy requirements with a local bankruptcy lawyer.
Chapter 13 bankruptcy is the other main type of personal bankruptcy available to individuals, and is designed to help homeowners facing foreclosure.
Filing Chapter 13 bankruptcy involves creating a three to five year repayment plan through the bankruptcy court. Missed mortgage and auto payments will be given priority in the plan, and credit card debts may be greatly reduced or eliminated.
Bankruptcy Ends Wage Garnishment
If you are fortunate to have a job, but fall behind on debt obligations, you may be subject to wage garnishment. Credit card companies are especially notorious for using wage garnishment to get money out of those who've stopped paying their bills.
Filing bankruptcy comes with a powerful benefit that can stop garnishment, along with debt-related lawsuits and collection calls. The automatic stay is a court order that is issued with your successful bankruptcy filing that puts an end to these and other forms of creditor harassment.
With the automatic stay in place, you can have the breathing room to focus on your case and begin moving forward. In many cases, the automatic stay may last through your entire case, up to your debt discharge.
Find Debt Help Today with a Bankruptcy Attorney
Put an end to your debt worries. Talk to a bankruptcy lawyer about how to address your debts the legal way—by filing bankruptcy.
Simply fill out our bankruptcy case review form or call 877-833-2410 today to arrange a free, no-obligation bankruptcy consultation with an attorney near you.