Can I File Bankruptcy If I Have Little or No Income?

July 12th, 2013 by Reed Allmand

bankruptcy

Filing for bankruptcy with limited income is possible, but it often depends on personal circumstances.  In such situations, debtors may qualify to file Chapter 7 instead of Chapter 13 bankruptcy.  In Chapter 13, you agree to a repayment schedule approved by the court based on your ability to repay.  If your debt obligations qualify for discharge or complete elimination, Chapter 7 may be the best option to consider.

If you are unemployed, receiving unemployment compensation, or work limited hours, you may be eligible to file for protection.  You should review eligibility requirements based on your situation.  At the beginning of the filing process you will take the means test to determine if you qualify.  This will review your income, debt, property, expenses, and other details pertaining to your finances.  The test has a unique formula that provides information on how your bills are paid based on your income and household size.  There is a median income amount each state sets in order for you to qualify.  In other words, your income would be at or under this amount to deem you as eligible for bankruptcy protection.

Having little or no income may help the bankruptcy process run easier for you, especially if you file for Chapter 7 protection.  Chapter 13 may help you cram down or reduce what you owe on obligations such as your vehicle or help you get caught up on missed mortgage payment, depending on your ability to make scheduled payments.  Discuss your situation with a bankruptcy expert.

Reference: http://www.filingforbankruptcyonline.com/legal-advice/bankruptcy/chapter-7/can-file-bankruptcy-income

http://www.nolo.com/legal-encyclopedia/file-bankruptcy-unemployed.html

 

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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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