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Filing for Chapter 7 bankruptcy after a job loss

| Mar 23, 2020 | Firm News

Sadly, recent events in the United States and the rest of the world are causing many to be laid off from their employment. This is causing a huge amount of stress for many families in North Carolina. Those who were already struggling with significant debts before they became unemployed could feel that they are now at breaking point, and they may worry that they will lose their home or be evicted.

It’s important to note that there are in fact safety nets in place for those who are struggling with overwhelming debts. Chapter 7 bankruptcy exists to help people in exactly this situation. If you are worried about how you will get through the coming months, you may wonder whether now is the time to file for bankruptcy. The following are some of the reasons why filing for bankruptcy after a job loss could be right for you.

It could wipe away credit card and medical debts

Many people left crippled by credit card debts and medical debts struggle even more when they lose their jobs. But Chapter 7 bankruptcy is designed to give rapid relief to those who are in these types of situations.

It’s ideal for those with low income and low assets

You can only apply for Chapter 7 bankruptcy if you have a low income or no income at all. This is because it is designed to protect those who have no other realistic way of paying off their debts. Furthermore, the process of Chapter 7 bankruptcy involves the liquidation of assets to pay off debts. In the majority of cases, any debts that are left over after all assets have been liquidated will be discharged. This means that low asset households are particularly suited to Chapter 7 bankruptcy since they will likely be able to clear all their debts.

Those who are unemployed are eligible

Unlike Chapter 13 bankruptcy, you do not need to use your income to pay off debts during Chapter 7 bankruptcy. This is why filing for Chapter 7 bankruptcy could be a great option after you lose your job.

If you are worried about your financial future, taking early action could help you to prevent the escalation of your debts.

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