Can I File for Bankruptcy Without a Job?

Bankruptcy is often considered a tool used by people without money, without income, and without any financial hope. The truth is people in many different situations file for bankruptcy. This includes people with fixed social security incomes, as well as those with no job at all. Bankruptcy for low-income seniors is an option for older people facing financial challenges.

It’s also good for people who are unemployed or who cannot work and it might even help people with steady jobs who are struggling to make ends meet.

Is Bankruptcy the Right Option for You If You are Out of Work?

Everyone’s situation is different, but you can file for bankruptcy if you don’t have a job. There is no law preventing you from doing so. You just need to have enough to pay for any associated court fees, as well as what your bankruptcy attorney charges to help you with filing.

The best thing to do is to speak to an attorney about your employment and financial situation. Not having a job likely disqualifies you from choosing Chapter 13 bankruptcy, but this is usually good news. The alternative, Chapter 7, means you’ll pay less on your debts before they’re discharged and your case usually wraps up in a few months, as opposed to three or five years.

What about Retired Seniors?

Sometimes, someone might have income without having a job. This can be the case for people of all ages, but it’s especially common for seniors living on social security. Many older people have accumulated enough to help them maintain a comfortable standard of living in retirement. However, if life takes an unexpected turn, someone can be comfortable one day and facing financial straits the next day.

This occurs most often when seniors accumulate credit card debt and/or medical debt.

The good news is, bankruptcy is an option for people even when they are retired and living on a fixed income.

Chapter 7 or Chapter 13 Bankruptcy for Low Income Seniors?

The best way to know which chapter bankruptcy is best for low-income seniors is to speak to an attorney. But it also helps to research your options when you first start considering bankruptcy so you’ll have some idea what to expect.

When you file for Chapter 7, you’re able to wipe out all of your dischargeable debt. However, a significant amount of your assets are at risk of liquidation when you file.

In Chapter 13, you maintain a larger portion of your assets, but you’ll commit to a repayment plan and be responsible for a certain portion of debt repayment.

To qualify for Chapter 7, you’ll need to pass the bankruptcy means test that evaluates your income and your expenses. One of the important things to know about the means test is that it doesn’t consider Social Security benefits income. This makes bankruptcy for low-income seniors a likelier possibility for many people.

To learn more about the differences between Chapter 13 and Chapter 7, check out this information from nolo.com.

Should I File for Bankruptcy If I Don’t Work and Rely on Social Security for Income?

The simplest answer to this complicated question is “maybe.” The best thing to do is schedule a consultation with an attorney to review your specific circumstances. One of the things seniors must consider when contemplating bankruptcy in retirement is how it will affect their assets. Working with an attorney means someone will be there to evaluate your situation and help you protect your assets.

To learn more or to schedule a consultation to discuss your situation, contact the Law Office of Robert M. Geller at 813-254-5696.