If you were already dealing with debts, suffering the sudden loss of your job could lead you into serious financial difficulties. Without the funds to make your minimum debt repayments, you may be facing the loss of your home and be inundated with communication from creditors demanding that you repay your debts.
All of this can be extremely stressful, and you may be doubtful that you will ever be able to clear your debts. However, filing for bankruptcy can help you to significantly reduce your debts, and in many cases, you will be able to be debt-free in a matter of months. The following are some possible options if you want to file for bankruptcy after a job loss.
File for Chapter 7 bankruptcy
For those who have a low income or no income at all, Chapter 7 bankruptcy is likely to be the best option. This is because you do not need to use your wages to tackle your debts. Instead, your assets will be liquidated to help cover the debts. Even if you do not have enough assets to clear all of the debts, you will likely benefit from a debt discharge at the end of the process.
The downside to filing for Chapter 7 bankruptcy is that you will lose all of your assets apart from the exemptions of a certain value held within property, cars and personal possessions. For this reason, Chapter 7 bankruptcy is likely not ideal for high asset individuals.
If you are struggling with overwhelming debt and you are unemployed, you should take immediate action to learn whether filing for bankruptcy could help you.
