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Ask a Riverside County Bankruptcy Attorney: Can I File for Bankruptcy If I Am Unemployed?

    Riverside County Bankruptcy Attorney UnemployedAs a Riverside County bankruptcy attorney, we are often contacted by people who are unemployed and facing difficult financial circumstances. Losing a job is financially devastating. It also makes it impossible for you to keep up with your monthly bills. When this happens, most people can only pay what is absolutely necessary and do not have the funds to cover things like credit card bills.

    Understandably, paying things like your mortgage, rent and car note is more important than paying credit cards. You need to keep a roof over your head, the lights on, and food on the table. Hopefully unemployment checks are enough to do so.

    Fortunately, if you are unemployed, filing for bankruptcy will allow you to deal with your unsecured debt so that you can avoid these pesky collection calls while trying to get back on your feet. We can file it for you as Riverside County bankruptcy attorneys.

    Can I File for Bankruptcy If I Am Unemployed?

    You can definitely file bankruptcy if you are unemployed. However, your current financial situation will directly influence the type of bankruptcy you can apply for.

    Chapter 7

    There are two main types of bankruptcy.  Most people who are unemployed qualify for Chapter 7.  Chapter 7 is sometimes referred to as liquidation.  This means that the bankruptcy trustee will review your assets and equity to determine whether you have any unprotected assets that they can sell.  The profits will be used to pay your creditors.  Therefore, it is extremely important to talk to a bankruptcy attorney to protect your assets.

    The other common form of bankruptcy is called Chapter 13. A Chapter 13 Bankruptcy is a where you and your bankruptcy attorney will set up a plan payment. It allows you to list all your debts and make a plan for what you are going to pay on a monthly basis.

    Each situation is unique, so we will let you know what is possible after examining yours. With this plan, your creditors will receive a portion of what you owe but not all of it. You will make one monthly payment and the funds will be dispersed to your creditors for a set number of years. Once complete, your bankruptcy will be discharged and you will be free from that agreement.

    How to Qualify for Chapter 13

    To qualify for a Chapter 13, you need to have enough money to make that monthly debt payment in addition to paying for your basic living expenses. A judge will decide whether or not you can. If a judge feels, that because of your unemployment, you will not be able to keep up with your monthly obligations, your Chapter 13 will not be approved. However, that does not preclude you from filing for a Chapter 7 and very often, this is better for someone who is unemployed anyway.

    Varying Forms of Bankruptcy One May Qualify For

    A Chapter 7 works differently in that you only qualify for it if you make under a certain threshold. The less money you make, the more likely it is that your Chapter 7 bankruptcy will be approved. This is the type of bankruptcy where your debt is wiped out or eliminated. Your unsecured debts will be wiped out in a Chapter 7 bankruptcy filing. Your secured debt like a mortgage or your car payment can either be included, and you will have to return the item, or you can reaffirm the debt and continue to make payments as agreed in order to keep them.

    To find out which type of bankruptcy you should file for, call our office and schedule an appointment with a Riverside County bankruptcy attorney.

     

     

     

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