Bankruptcy Options For The Unemployed

In what can only be called one of the worst extended economic crisis’ this country has seen since the great depression, with millions of people out of work and with seemingly no hope on the horizon, the only option for many of the unemployed out there is bankruptcy. Though, the decision to file for bankruptcy should never be rushed into, and should only be utilized as a last resort, it is a viable and logical option and for those who have decided to go that route, there are a few things you should know.

First, when it comes to what type of Chapter to file for in bankruptcy court, there are ultimately two legitimate options at your disposal. The first option, and the less likely choice for the unemployed is to file for Chapter 13 which is also known as “reorganization”. It is known as this because Chapter 13 requires filers to adhere to a strict repayment schedule to fully reimburse the debt they owe out. Obviously, because of your lack of income, and your unemployed status, committing to repay all of your debts in full when you aren’t sure what your income status will be in the upcoming months makes it an unfeasible option for you.

The best option for the unemployed when filing for bankruptcy would be to file for a Chapter 7. Also known as a straight bankruptcy, Chapter 7 is a liquidation proceeding in which the debtor will turn over all non-exempt property to a bankruptcy trustee who then turns it into a payment to the debt collectors. Beneficially for the debtor, in a significant number of Chapter 7 bankruptcy cases, the debtor has little to no assets to lose in the first place, leading to a relatively quick, fresh start!

If you are one of the millions of people who feel hopelessly buried under a mountain of debt and the stress that comes along with it, you are not alone. You have options and people willing to help. You are who bankruptcy courts were intended to help so it is time to allow yourself to be helped.

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