One of the most common reasons noted for filing personal bankruptcy is unemployment. Of course, it’s difficult if not impossible to pay your bills if you have little to no money coming in. As many as 2/3 of Americans list job-related financial stress as the reason for filing personal bankruptcy. While having six months of salary or monthly bills stashed away in your savings is ideal, this is unrealistic for most of us.
If you are unemployed long enough, filing bankruptcy may be your only option to keep your most essential possessions while finding work to get back on your feet. Bankruptcy can give you time to reassess your situation and make decisions about your future income.
Since you will need to report your income for the previous six months, filing shortly after losing your job may prevent you from passing the means test by showing your income as too high. It is in your best interest, if possible, to wait a few months since your income will be considerably less for the means test.
Chapter 7 or Chapter 13 Bankruptcy
Chapter 7 allows you to cancel debt such as medical bills and credit cards quickly. You may have to surrender any vehicles you are unable to make payments towards and allow the trustee to sell it to pay your creditors with the proceeds. Chapter 13 allows you to keep most of your property, but you will need to work out an approved payment plan to catch up on past missed payments.
If you are without a job, and no income opportunities in your near future, bankruptcy will give you some time to liquidate your assets while satisfying your lenders and leaving you with a fresh start.
If your debt has become unmanageable and if you are unemployed or underemployed, consider contacting a qualified Houston bankruptcy attorney to discuss your situation and see what options you may have