You may find yourself in a dire financial situation that you do not know how to get out of. And while you are already down on your luck, what might make matters worse is if you lose your job due to circumstances beyond your control. This is when a bankruptcy declaration may be helpful, if not necessary. Read on to discover your eligibility and how a seasoned Louisville, Kentucky Chapter 7 bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you calculate this.
Can I file for bankruptcy while I am unemployed?
Put simply, your eligibility for bankruptcy is not dependent on your employment status. Meaning, you may file for Chapter 7 bankruptcy during the time in which you are unemployed. There are great benefits to this, such as the following:
- You may relieve yourself from dischargeable debts, such as credit card debt, medical bills, and personal loans.
- You may relieve yourself from the harassing collection activities by your creditors.
- You may relieve yourself from wage garnishment on your future paychecks.
However, to reap these benefits, you must ensure that you pass the state of Kentucky’s Chapter 7 means test. That is, you must confirm that you fall below the median income line, which reads as follows:
- As an individual: you must earn less than $55,971 per year.
- As a family of two: you must earn less than $66,902 per year.
- As a family of three: you must earn less than $75,700 per year.
- As a family of four: you must earn less than $94,937 per year.
Worth mentioning is that $9,900 is added to the limit for each additional family member over four. If you find yourself still above this median income line, then you may deduct allowable debts. These may include your income taxes, childcare expenses, household expenses, etc.
Will I pass the Chapter 7 means test while I am unemployed?
You may assume that, due to your unemployment status, it may be easy to prove that you cannot keep up with your bills and debts; enough where you qualify for a Chapter 7 bankruptcy filing. Unfortunately, the Chapter 7 means test may not be as straightforward as this.
That is, you will have to report your monthly income for the previous six months; this monthly income may be greater than the enforced limit if you were employed during this time. Another posed challenge may be that you will have to report your unemployment benefits collections for the previous six months; these benefits may push you over the enforced limit.
This is all to say that it may take more than six months before you may proceed forward with a bankruptcy filing. When it comes to your petition, you need a competent Louisville, Kentucky consumer bankruptcy lawyer by your side. This is why you must contact Schwartz Bankruptcy Law Center today.