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Losing your job is one of the most stressful things that can happen to anyone. Suddenly, you don’t have a regular paycheck anymore. No way to pay the rent and utilities, put food on the table, pay off your mortgage or vehicle, and deal with countless other expenses. Before you know it, you’re buried in debt with nowhere to turn.
Unemployment is one of the most common reasons why individuals file for Chapter 13 or Chapter 7 bankruptcy in Raleigh. And with the help of our friendly attorneys here at Weik Law Office, they have the power to help you get back on your feet. It’s designed to:
- Activate the automatic stay, which will stop all creditor actions and harassment against you
- Prevent your utilities from being shut off
- Prevent you from getting evicted or foreclosed
- Help you keep your vehicle
- Give you a fresh start by wiping out majority of your debts before you get a new job
Of course, it will still depend on the particulars of your case and what chapter you file for.
Being Unemployed Can Help You Qualify for Chapter 7 Bankruptcy
Chapter 7 bankruptcy can wipe out dischargeable (qualifying) debt such as medical bills, personal loans, and credit card debt for eligible debtors.
To qualify for Chapter 7, however, your income must be low enough to pass North Carolina’s Means Test. So, if you’re unemployed and have minimal or no income, you have a greater chance of passing the test compared to those with steady or well-paying jobs.
Unemployment and the Means Test
Under the Means Test, your average monthly income for the past 6 months (right before you file for bankruptcy) will be compared against the state’s median income for a household the same size as yours. If your average income is below the median, you automatically pass. That also means you won’t have to complete the rest of the form.
In case you don’t pass the first part of the test, our bankruptcy lawyers in Raleigh NC will explain your other options.
For instance, part of the computation is deducting your expenses from your income. If there’s not enough left for you to make meaningful payments under Chapter 13, you can still qualify for Chapter 7.
Filing for Chapter 13 and Unemployment
Most unemployed debtors file for Chapter 7, but Chapter 13 has several mechanisms not available under Chapter 7. For example, it can help you:
- Save your home from foreclosure
- Remove a second or higher mortgage
- Catch up on missed car payments and keep your vehicle
- Keep other assets
- Get rid of any remaining qualified debt after the repayment plan is done
Our bankruptcy lawyers in Raleigh NC will help you explore both Chapter 7 and Chapter 13 to help you make the best decision.
Begin Improving Your Financial Situation Today
There are many more benefits of filing for bankruptcy while you’re unemployed. The sooner you can file, the faster you can get back on track. Contact Weik Law Office today at 919-845-7877 to schedule a FREE consultation with one of our trusted and friendly bankruptcy attorneys.