Can I File Bankruptcy If I Am Unemployed?

The short answer is, yes. While your monthly income may have an effect on what type of bankruptcy case you file, unemployment itself will usually not prevent you from doing so.

If you seek relief under Chapter 7, not having income from employment could actually work in your favor. The court will determine your average income and as long as you qualify under the means test, you will be eligible to file. While the means test is somewhat detailed, it basically boils down to whether your household income is more or less than the median for the applicable household size in your state. If it is less, then you should qualify for Chapter 7 relief.

If you seek relief through a Chapter 13 Personal Reorganization, your monthly income will be more of a factor in getting your case confirmed. In order for your case to be approved by the court, you must be able to show the court that your household income can support the plan payments. The good thing is that it can come from employment, social security income, retirement or even unemployment compensation. As long as you can show to the court that you can support the plan and provide for your monthly living expenses, your case can be confirmed.

There are many factors that go into filing under Chapter 7 and filing a Chapter 13 Personal Reorganization. That is why it is essential that you are represented by an experienced bankruptcy attorney. If you need financial help, please contact our office nearest to you to set up a free private and confidential consultation visit with one of our licensed attorneys.