Do I need to have a job to file bankruptcy?

This is a common question, and the answer is simply, “no.”  There is no requirement that states you must be employed to file for bankruptcy.  As a matter of fact, becoming unemployed is one of the top three reasons people file for bankruptcy in the first place.

Top 3 reasons people file for bankruptcy

• Medical Bills & Expenses
• Job Loss
• Excessive Credit Card Debt

Chapter 7 is designed to wipe out unsecured debts, such as credit cards and medical bills.  However, a debtor interested in filing chapter 7 is required to pass the income requirements of the ‘means test.’ (Read more about the Means Test.)  If unemployed, you are more likely to have a smaller household income, compared to the state median.  (Even if you are currently receiving unemployment benefits.)  With little to no assets, you have increased the likelihood that you may qualify for a Chapter 7 bankruptcy.

Unemployment Facts for WI

• Although unemployment rate in Wisconsin have improved over the past few years, (from 8.7% / Aug. 2010 to 6.9% Aug. / 2013), the numbers still indicate that many people are out of work.   
• In Wisconsin, unemployment benefits are between $54 and $363 per week.  A person can collect regular unemployment benefits for up to 26 weeks. 

Chapter 13 bankruptcies are setup differently than Chapter 7, as they require some form of income to afford a repayment plan for all or a portion of the debt.  (The repayment plan for Chapter 13 is typically 3-5 years in duration.)  Because it’s required to make monthly payments to the bankruptcy trustee, Chapter 13 may be difficult for the unemployed.  However, there are special circumstances whereby a debtor has enough income from other sources to fund Chapter 13.

Filing bankruptcy can be a challenge.  An experienced Bankruptcy Attorney will guide you through the process of determining which type of bankruptcy may be the best option for your individual circumstances.

Throughout the state of Wisconsin, thousands of people have found debt relief from the bankruptcy attorneys at Debt Advisors Law Offices.  For solid advice about the bankruptcy process, call for a free consultation.