Americans around the country are still struggling to rebound from the 2008 economic crisis.  Often, efforts to restore our financial stability include taking on one or two part-time jobs in order to supplement our income.  Unfortunately, many Georgians have found themselves unable to find any work at all and are now currently unemployed.

With mounting bills to pay and little to no income coming in every month to pay their debts, many unemployed Georgians consider filing bankruptcy as a solution to their financial problems.  By working with a knowledgeable and understanding bankruptcy attorney, Georgians who are in this difficult situation can rest assured that their rights and interests will be protected and represented against their creditors.

Your Employment History and Future

One of the first things to consider when deciding whether to file bankruptcy is your employment history and future.  If you have been out of a job for several months and feel that you will not be able to find a job in the near future, your creditors may be able to seize any assets you have and apply them to your debts.  However, if you do not have any assets then there is nothing the creditors can seize, so it may be better for you to not file bankruptcy yet.  The timing of filing for bankruptcy is very critical because an individual is limited to how often he/she can file for bankruptcy.  By filing prematurely, you may find yourself in a situation where you still cannot find a job several months down the line, and as a result your debt has begun to mount against you again.

If however you feel that you will likely find a new job in the near future, bankruptcy may or may not be the best option for you at all. You may need to file quickly while you can still pass the means test; Or it may be better for you to try to negotiate with your creditors and restructure your debt obligations.  An attorney will be able to advise you on which strategy will best alleviate your financial concerns and also pave the way for a better financial situation in the future.

Filing for Bankruptcy While Unemployed

If after consultation with an attorney you decide that filing for bankruptcy while you are unemployed is the best decision for you and your family, you need to know which type of bankruptcy best suits your needs.

Individuals are eligible to file Chapter 7 or Chapter 13 bankruptcies.  Chapter 7 allows debtors to wipe away most of their debts (some debts such as student loans, alimony, and child support may not be wiped away through the bankruptcy process).  Chapter 13 allows debtors to create a new debt repayment plan that must be approved by the bankruptcy court.  Once the plan expires (which is usually after five or seven years), any remaining debt under the plan is wiped away.

However, you have to be able to prove to the court that you have access to sufficient income in order to make the proposed payments under your plan – being unemployed typically makes this difficult which is why many unemployed individuals opt to file for Chapter 7 instead of Chapter 13.

I Was Unemployed When I Filed for Bankruptcy – But I Just Got a Job

If an unemployed person files Chapter 7 bankruptcy and subsequently lands a new job, the bankruptcy court won’t usually deny the person’s bankruptcy application and the case will proceed just like any other case.  However, if an unemployed person files for Chapter 13 and then gets a new job, the resulting increase in the person’s accessible income could have an effect on the repayment plan payment amounts.  An experienced bankruptcy attorney will be able to guide you through all of these scenarios and advise you on the best course of action to take for your case.

To learn more about how bankruptcy may help you or a loved one who is unemployed, contact our office today.  We look forward to speaking with you!