Filing for Bankruptcy without a Job

In both California Bankruptcy law, as well as Federal bankruptcy law, there is no requirement that says you must have a job in order to declare bankruptcy. In fact, loss of employment, is a contributing cause of bankruptcy in the US.

When filing for Chapter 13 bankruptcy, however, not having stable income may be an issue. In Chapter 13 bankruptcy, often referred to as repayment bankruptcy, you need to be able to afford monthly payments on your nonexempt debt, as well as, maintain your household by paying your monthly expenses. This repayment period is usually three to five years and gives you the opportunity to obtain debt relief while repaying your creditors and keeping your property. It is possible to be approved for Chapter 13 bankruptcy protection if you are unemployed assuming you still have a way to fund your repayment plan. Individuals have used unemployment benefits, social security, or other income sources in the past in order to fund their plan.

On the other hand, when referring to Chapter 7 bankruptcy, you may be more likely to qualify if you don’t have a job, as the means test is used to assess your household income compared to your expenses. In a Chapter 7, or liquidation bankruptcy, some or all of your unsecured debts are wiped out. If you are unemployed, the odds are you won’t have income or will be collecting unemployment benefits, which should put you well below the Chapter 7 income limits.

When filing for bankruptcy, it’s important to have the ability to provide documentation for your income, your assets, and your liabilities. The bankruptcy courts will typically dismiss a bankruptcy case if you can’t prove that you are able to afford Chapter 13 bankruptcy. Similarly, if you are going to file for Chapter 7 bankruptcy you must pass the means test in order to qualify, so make sure that you keep good records of anything that might help your case. Additionally, individuals that enlist the aid of a Rocklin bankruptcy attorney have a much higher chance of having the bankruptcy judge approve their bankruptcy case and discharge their debts. Make sure you consult an experience bankruptcy lawyer to help you navigate the many steps and forms necessary to achieve debt relief through bankruptcy protection.