There are many frequently asked questions regarding bankruptcy. One that is of great concern is when a person has recently lost his job. Many people, even those with lucrative salaries, live almost paycheck to paycheck and with little savings. They have mortgages, car loans, and credit card debt that can quickly overtake them if they become unemployed, even for a short period. Therefore, today, we are answering the question, “Should I file bankruptcy if I just lost my job?”
First and foremost, you must understand that each individual situation is different. This article can only provide general information about filing bankruptcy after losing employment. It is always best to seek out the advice of a qualified bankruptcy attorney. Who will examine your case and provide the best advice for your circumstances. That said, after losing a job, many feel a sense of urgency and want to file bankruptcy quickly. In many instances, this is not the best course of action.
As an example, let us look at a person who was making a good salary, but has little savings and few investments. This is not uncommon for many Americans. Prior to their employment disruption, they had good credit and were paying their bills on time. Regardless, once they find themselves unemployed, things quickly fall apart. They may even need to use a strategy of taking cash advances to pay basic necessities. Bankruptcy quickly starts to make sense. Don’t you agree?
All things considered, you need time to evaluate your personal situation. There is a means test when filing a Chapter 7 bankruptcy. Therefore, even though you may be unemployed and have no income, filing too soon could hinder passing this benchmark. Basically, it all comes down to your income over the last six months. If your earnings before were greater than the state’s median income, you may not qualify. Your attorney may advise you to wait a few months. This will allow your income to go down, making things feasible.
What haven’t we covered yet that is important to you? If you would like to talk filing bankruptcy after losing your job, or need more information, please contact us.