Bankruptcy / Bankruptcy Q&A

What Happens If I Become Unemployed During Bankruptcy?

Unemployed During Bankruptcy

It’s possible a job loss could affect the outcome of your case, yet it depends on which chapter you’ve filed. Losing your job will likely have an impact on how you maintain assets such as your vehicle and home. How your job loss affects your case may vary but unemployment benefits may be an option to help you satisfy financial obligations if you qualify.

Job Loss During Chapter 7 Bankruptcy

Chapter 7 bankruptcy helps you discharge or eliminate qualifying debt. Losing your job may pose a challenge on making payments toward your home or car. A job loss should be reported to your bankruptcy attorney as soon as possible to review options on how you can keep assets. Keep in mind you may need to consider surrendering assets if creditors aren’t willing to work on a solution. Plus, reviewing your options with your legal expert may help you avoid foreclosure and repossession after your bankruptcy case is completed.

Job Loss During Chapter 13 Bankruptcy

A job loss during a chapter 13 bankruptcy may impact your ability to make payments toward your repayment plan.  Any income changes, whether it’s a raise, reduction or loss, should be brought to the attention of your bankruptcy trustee.  It’s possible you may be able to request a modification of your repayment plan; this could reduce payments made to certain creditors.  Some debtors elect to surrender an asset to help reduce their payments such as their vehicle.  Another option includes getting permission from the court to convert your case from a Chapter 13 to a Chapter 7; eliminating responsibility for most of your debts through a discharge.

If you have any questions regarding bankruptcy we are here to help you. Simply contact us to set up a free consultation. 

Reference:

http://www.duncanlawonline.com