What Happens If I Become Unemployed During Bankruptcy?

August 27th, 2012 by Reed Allmand

What Happens If I Become 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.

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.

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.  Contact your attorney to review available options for your situation.

http://www.duncanlawonline.com

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About Reed Allmand

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Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."

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Why do I need to submit a new wage order when I modify my plan

When we modify your bankruptcy plan we are changing your plan payments. This means that we have to get with your employer and change the terms and amount of your wage order. The only way we can do that is by filling out a new wage order form.  

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If the bankruptcy stay terminates on your home that means that even though your in bankruptcy, your creditor can pursue all there legal remedies they can pursue if you were not in bankruptcy. This includes foreclosure, and having your house sold and evicting you from your house.

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