During the aftermath of the Great Recession, many of our friends and neighbors lost their jobs after several companies downsized or outright closed their doors altogether. Additionally, many of our younger residents are graduating with first-rate educations from one of our fantastic Georgian universities, but they are unable to find work since the economy continues to struggle.

When one has been unemployed for a significant period of time, the household debts continue to mount and it is common for people in this situation to look to bankruptcy as a way to get out from under their bills. Read on to learn more about whether filing for bankruptcy is appropriate for your circumstances. If you still have questions, call our office to speak to an experienced bankruptcy attorney today – we look forward to speaking with you!

1. Before filing for bankruptcy, you should know whether your creditors will be able to seize your assets or garnish your future wages. In general, there are two types of bankruptcy cases: Chapter 7 and Chapter 13. When most people think of bankruptcy, they are thinking of Chapter 7 because at the conclusion of this type of case, the person’s qualifying debts are wiped away (i.e. discharged) and the person is no longer responsible for them. Conversely, in Chapter 13 cases, the person works with the bankruptcy court and the creditors to come up with an alternative payment plan for paying off the debts. Once the plan period concludes, the remaining debt is then discharged.

During the course of a bankruptcy case, one of your creditors may sue you. If they win a judgment against you, they can seize your nonexempt property in order to satisfy your debt. However, the good news is that unemployment earnings are exempt property and therefore a judgment creditor would not be able to garnish those earnings from you.

2. Before filing your case, you should also make an honest assessment of your future employment outlook. If you are unemployed due to a disability or because you were laid off later in life and do not have skills that are relevant in today’s job market, then your current financial situation may be unlikely to improve and filing for bankruptcy would be in your best interest. However, there is a very strict limit on how many times you can file a bankruptcy case and filing a case prematurely could be disastrous for its own reasons.

Your unemployment may be a temporary setback due to the economic recession. If you feel that you will likely be able to find employment (and you have simply been unlucky in the past) then bankruptcy may not be the right option for you. Filing for bankruptcy can have long-lasting and serious consequences. There are many other debt relief options available that may help you overcome your financial troubles before the situation worsens, such as working directly with your creditors to lower your payments or entire debts, or refinancing or selling your house and using the proceeds to pay off some of your bills. To discuss what other options you may have, contact our office.

3. Depending on the type of case that you filed, a post-bankruptcy job may affect the outcome. In general, a bankruptcy judge will not deny your Chapter 7 case simply because you landed a job after you filed the case. But if you filed a Chapter 13 case then the access to new employment income may affect the Chapter 13 plan payments. Depending on where you are in the Chapter 13 process when you landed the job, your plan may need to be revised to account for your new earnings.

Contact our office at 404-913-1529 to speak to an experience bankruptcy attorney about your case and to schedule your first meeting. We look forward to speaking with you!