Can I File for Bankruptcy If I Lost My Job?

employee packing desk

While it is an unfortunate event to have lost your job, you may feel comforted knowing that this is just a temporary situation. However, you may not feel so comforted if you are already in a worrisome financial predicament. This may just be the last straw before you turn to a bankruptcy declaration. Continue reading to learn whether you are eligible and how an experienced Rockland County Chapter 7 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help calculate your next move.

Can I file for bankruptcy if I recently lost my job?

The short answer is, yes, it is quite possible to file for bankruptcy after having lost your job within the past six months or so. This is regardless of whether or not you are now collecting unemployment benefits. Generally speaking, your need for bankruptcy does not depend on your job status.

With this, it is more than likely that you will qualify for Chapter 7 bankruptcy. This bankruptcy type allows you to discharge many of your debts, such as your credit card debt, medical bills, and personal loans. Ultimately, wiping out this debt while collecting unemployment benefits may allow you to stay afloat during your job search.

Can I pass the Chapter 7 means test?

You must understand that while you may be eligible for Chapter 7 bankruptcy, you may not be able to clear all of your dischargeable debts. This is because you must first pass the Chapter 7 means test.

Firstly, you must compare your gross household income to New York State’s median income. This median income is dependent on family size, and examples are as follows:

  • As an individual: you must earn less than $68,814 per year.
  • As a family of two: you must earn less than $84,958 per year.
  • As a family of three: you must earn less than $103,444 per year.
  • As a family of four: you must earn less than $126,167 per year.

Secondly, if your median income exceeds this limit, then you may deduct your expenses from your gross income. Examples of allowable expenses are as follows:

  • Your mandatory income taxes.
  • Your mandatory income deductions.
  • Your mandatory childcare expenses.
  • Your food, utility, and otherwise household expenses.

This is all to say that passing the Chapter 7 means test may be difficult immediately after you have lost your job. This is because you must report the amount you have received during the past six months, which may have been greater figures. What’s more, you must report the unemployment benefits you have been receiving. Rest assured, this may become possible with time.

This is why, when petitioning for bankruptcy, you need a skilled Rockland County bankruptcy attorney by your side. You must contact The Law Offices of Allen A. Kolber, Esq. today.