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Does employment status affect your bankruptcy filing?

As an unemployed resident of Washington, D.C., you may be concerned that your lack of employment will affect your ability to file for bankruptcy. Some rumors do make it sound like it’s impossible, but is it?

In short, Patch Media states that the answer is no. Unemployment does not affect your ability to file for bankruptcy. However, you might face more risks and losses in your filing than an employed person would. Chapter 7 bankruptcy would likely be the easier option for you, and will also likely be the type of bankruptcy that you automatically qualify for once you apply due to the low amount of income you currently bring in.

Chapter 13 bankruptcy, on the other hand, would likely be difficult for you to manage unless you have at least one constant source of income. This type of bankruptcy hinges on the idea that you will be able to make small payments throughout the bankruptcy period, slowly paying back your debts without having to liquidate any personal items or sell anything off. On the other hand, you can use social security or unemployment benefits to help you craft a payment plan, if you receive those things.

As you can see, even though it’s possible to file for bankruptcy while unemployed, you will need to give it even more thought than the average filer. There are a lot of risks you must take into consideration, and in the end, you need to determine for yourself if their benefit outweighs the drawbacks.

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