If you are preparing to file for personal bankruptcy, you are not alone. The United States Courts report that over 700,000 people filed for bankruptcy in 2019, and while this number does not eclipse business bankruptcies for that year, it is still considerable.
There are several factors that can affect your filing, and your employment status can be of special importance. Whether you choose Chapter 7 or Chapter 13, each has several regulations that may affect your filing.
Overall employment status
Both Chapter 7 and Chapter 13 types of bankruptcy have the same overall goal, which is to free you from your debts. However, you may have to surrender some property to erase debt when you file for Chapter 7. Your employment status may affect which property you can keep in this case, as it allows you to retain items that are necessary for upcoming or current employment. This exempt property may vary depending on the nature of your bankruptcy case.
If you are currently employed but do not make enough money to cover medical or credit card debt, you could still qualify for either Chapter 7 or Chapter 13 bankruptcy protection. Some factors may depend on the individual circumstances of your finances, such as:
- Length of current employment
- Other sources of income, if any
- Current wages
If you chose to apply for Chapter 7 bankruptcy, employment may help you qualify for debt erasure.
Instances of personal or non-business bankruptcy filings are falling slightly across the country. However, because each case has its own circumstances, you may want to review local and federal laws before you proceed with the filing.