Normally, if you are unemployed and facing a tremendous challenge dealing with your debt, you may be considering pursuing the bankruptcy. There are some specific considerations that you need to keep in mind if you file for bankruptcy protection while unemployed. If you are filing for bankruptcy while unemployed, you generally have one option available, which is to file a Chapter 7 bankruptcy. In a Chapter 7 bankruptcy proceeding, you are agreeing to liquidate any assets to pay off and discharge your debts. This is different from a Chapter 13 proceeding, which occurs where a debtor agrees to pay off his or her debts pursuant to a payment plan.
Usually, the Chapter 13 Bankruptcy proceeding is not available when unemployed, since the individual is not making any income with which to pay off the debts. Consequently, a Chapter 7 bankruptcy proceeding is generally the most appropriate option for filing bankruptcy while unemployed.
State Laws:
In general, it is crucial to check the state laws of the particular state in which you reside. Every state has different laws applicable to the filing of bankruptcy by unemployed individuals. For instance, some states have laws which apply to the length of time a person must be unemployed and how the person's prior income must be calculated and on what basis. Therefore, while this article presents a general overview of filing bankruptcy while unemployed, it is important to ascertain your state's bankruptcy laws and to keep your particular state's requirements in mind.
Rule out a Chapter 13 bankruptcy. In a Chapter 13 bankruptcy, a debtor pays off her creditors over a set period of time. Because you have no available income, Chapter 13 bankruptcy is not a realistic option for you.
Contact organizations that provide free legal services to see if you qualify for representation in your case. These groups include legal aid organizations and clinics operated by law schools.
Obtain free standardized forms to use in filing a bankruptcy case. These forms usually can be obtained through the bankruptcy court clerk's office as well as from many office supply stores.
Organize the names, addresses, account numbers and balance due on all of the accounts for which you owe money.
Complete the bankruptcy petition form together with the associated documents. Make sure that you complete the matrix of creditors, which is the standard form that is used to provide information about your creditors.
Prepare a motion to gain permission from the Bankruptcy court to pay your filing fee in installments.
File the bankruptcy petition and associated documents, together with the motion regarding the filing fee, with the clerk of the bankruptcy court.
About the Author
CC Brown is a law firm that represents clients vigorously in several areas of practice.
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