Can I File for Bankruptcy in New York if I am Unemployed?

As many people lose their jobs to Covid-19, bankruptcy will provide an out that gets creditors out of the picture so that families may rebuild. There is absolutely nothing stopping you from filing bankruptcy while you’re out of work, and it may, in fact, be the best decision you ever made. 

There are, of course, issues to think about as you move into bankruptcy. If you are living on savings you and your attorney will want to ensure that this doesn’t stop you from entering into Chapter 7 if that is your plan. Exemptions can help preserve this money.

Keep in mind that you’ll still have to pass the Chapter 7 means test. If you’re only recently unemployed then you’ll have to use your prior income, even if it’s not coming in now. You may have to wait a few months before moving forward. You may also complicated the case when you get a new job, which means you’ll want to work closely with your bankruptcy attorney to solve issues of timing. 

Chapter 13 is considered the “wage earner’s plan” and does come with a new monthly payment. If your unemployment insurance or other back up won’t allow you to meet those payments it would be best to avoid taking on those obligations. 

As a result, you’ll need an attorney. It’s counter-intuitive, because it will cost you a little bit to get an attorney’s help. Yet you’re also more likely to be successful with your bankruptcy if you do. These complex issues do plenty to demonstrate what can go wrong if you’re don’t have help making decisions about everything from the right chapter to file for your situation to choosing the right timing to make the move.

If you want to try to stay in your house or keep your car during your period of unemployment, you’ll need an attorney to help you use your exemptions correctly or choosing the chapter that will help you meet your goals.

Nothing about unemployment is easy. Yet we can ensure you don’t get harassed or sued while you’re looking for your new job. We can help you protect your retirement accounts, home, and car. It’s just a matter of choosing the right strategy. 

Contact us today to set up a free consultation. We’ll help you craft a game plan. 

See also:

Why You Should File Your New York Bankruptcy Now

Are You Waiting Too Long to File Your Orange County Bankruptcy?

7 Signs You Should File Bankruptcy

 

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