Recently Lose Your Job? Bankruptcy Could Help.
Losing a job is extremely difficult. For one, you lose your income — something you’ve been using to support yourself and loved ones, and something you’ve been relying on to keep a roof over your head and to pay for the transportation you need to get to a job, interview, or go to a family function. Not only does the loss of a job prevent you from having the money to get what and where you need, but it also makes it near-impossible to pay off debts or prevent new debts from affecting your financial situation.
As anyone who’s lost a job before knows, it then becomes a vicious cycle — you don’t have a job to make money, you don’t have enough money to pay the bills, and not being able to pay the bills or have access to transportation makes it much more difficult to find and secure a new job so you can get back to normal.
Fortunately, if you’ve lost your job and are struggling to stop your world from spinning, bankruptcy could provide a solution for you.
What Does The Bankruptcy Process Look Like?
For a detailed explanation of the bankruptcy process that you could undergo, we recommend checking out this resource or contacting us today. That said, we want to take a brief moment to look at the two main types of individual bankruptcy and how they differ.
When filing for bankruptcy, an individual will either undergo Chapter 7 bankruptcy or Chapter 13 bankruptcy. Both types of bankruptcy have a process to pay back lenders, and both result in the discharge of remaining debts upon completion of the bankruptcy process. The major differences between the two are how they pay back lenders and the amount of time that each type takes.
Chapter 7 Bankruptcy
For Chapter 7 bankruptcy, debts are paid by seizing nonexempt property from the party filing for bankruptcy and distributing that amongst lenders. While this may seem less than ideal, Chapter 7 bankruptcy is usually completed within a period of four to six months, making it a comparatively fast process. What’s more, Chapter 7 bankruptcy is designed for individuals who make less than the household median income for their area, making it an accessible form of bankruptcy.
Chapter 13 Bankruptcy
With Chapter 13 bankruptcy, nonexempt assets are safe because the bankruptcy court will draw up a payment plan based on your debts. The entire process takes about three to six years on average; however, the extended process is a small price to pay considering you get to keep your property! Once the agreed-to terms are fulfilled, remaining debts get discharged and the process is nearly complete.
While this may seem preferable to Chapter 7 bankruptcy for some people, it’s important to note that in order to qualify you must, for starters, make more than the median household income for your area. Thus, you may not qualify for this chapter of bankruptcy.
Final Thoughts
Like we noted above, this is only a general introduction to bankruptcy and how it could help you in the event of job loss. The bankruptcy process contains many components, things such as credit counseling, document filing, confirmation hearings, trustee meetings, and so much more.
If you’re interested in learning more about bankruptcy and how it could help you stabilize your finances after losing a job, please contact us today! We’ll be happy to guide you through the process and represent you where needed.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.