How Unemployment Affects Your Chances To File Bankruptcy
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How Unemployment Affects Your Chances To File Bankruptcy

On Behalf of | Aug 1, 2018 | Uncategorized |

If you are a GA citizen who is struggling financially because of unemployment, it may be time to consider filing for bankruptcy, which could assist you get a fresh start by minimizing or getting rid of most of the financial debts that you owe. Nonetheless, while unemployment may aid you get approved for particular types of bankruptcy, not having a work could prevent you from choosing others. Continue reading to find out more concerning the influence of unemployment on your ability to submit bankruptcy in Dalton, GA. Then, contact Jack Setters, bankruptcy attorney, for a totally free consultation regarding your monetary alternatives for getting debt relief.

Can You File Chapter 7 If You Are Unemployed?

According to Bureau of Labor Statistics, about 4.1% of Americans are presently out of work. However, Georgia’s unemployment rate is somewhat higher than the national average, fluctuating around 4.5% as of January 2018.

Without a regular income, many people battle to keep current on their home mortgages, utility costs, charge card expenses, and other costs. For lots of households, a single medical bill or car repair is a hard hit on their pocket. If you are experiencing financial difficulty as a result of prolonged unemployment, bankruptcy can be a possible remedy.

As for Chapter 7, you do not need a work to apply for it in Dalton, GA. In fact, being unemployed could even help you when passing “means test”. It’s easy to understand this process from its name. It measures (tests) your financial ability (means) to pay off your debts to creditors. If your family income drops below the Georgia average earnings for a family of equal size– something which is more likely to take place if you are out of work– you pass the means test and might consequently apply for Chapter 7.

Due to the fact that means test considers your gross income over the past 6 months, it could be a good strategy to wait a little before filing if you’ve lost your job recently. Experienced bankruptcy attorney Jack Setters will help you to understand whether Chapter 7 is good for you and determine the best time to file.

What About Chapter 13?

Technically speaking, you do not require a work to file for Chapter 13 in GA. However, unemployment could become a significant challenge in Chapter 13, and also could possibly prevent you from successfully finishing the Chapter 13 process in Dalton, Ringgold and  other places in Georgia. To understand why, you need to have some background concerning exactly how Chapter 13 bankruptcy works.

With a help of bankruptcy attorney, a debtor sets up a financial plan, called “reorganization plan” under Chapter 13. The purpose of the plan, which needs to be approved by the bankruptcy court, is to develop an arrangement between you (the debtor) as well as the people or entities to which you owe debts (your creditors). The plan, which lasts from three to five years depending upon your financial situation, organizes your debts based upon their relevance, guaranteeing that priority debts, such as child support, and also debts that are secured by collateral, such as car loans, are the first to be settled.

In order for a Chapter 13 debtor to constantly stay current with his/her reorganization strategy, which normally requires month-to-month settlements, the debtor should have adequate disposable income — which is where unemployment can become a trouble. If the court finds that you lack enough financial resources to take care of a reorganization plan successfully, you should file Chapter 7 instead. Nonetheless, if you could prove that you have sufficient income from resources aside from a job– as an example, Social Security benefits or money you’ve made by investing– you may have the ability to file Chapter 13 while out of work.

 Bankruptcy Attorney Can Help You Get Debt Relief

Unemployment does not necessarily need to stop you from filing bankruptcy. If you are out of a work and also need help getting rid of  your debts, bankruptcy is the best solution. Depending on which bankruptcy Chapter you file, which exemptions you utilize, as well as other factors in your case, you can achieve economic objectives like protecting your home from foreclosure and stopping calls from debt collectors. It goes without saying that getting your debts under control can give you the freedom and flexibility to start building better credit in the future.

If you are out of work and think about filing bankruptcy, contact Jack Setters bankruptcy attorney for the best personalized legal services.