Bankruptcy and unemployment

On Behalf of | Oct 21, 2020 | Bankruptcy |

If you recently lost your job or you have not worked for many months, you are likely facing many different emotional and financial hurdles. Unfortunately, many people who are out of work take on high levels of debt, which become even more unmanageable due to late fees, interest and other penalties. If you are struggling with significant debt due to unemployment, it is critical to go over all of your options. Sometimes, bankruptcy provides people with financial freedom and allows them to pursue new opportunities.

According to the U.S. Courts, more than 764,000 people filed for bankruptcy during a 12-month period that concluded in March 2019. Some people are hesitant to file for bankruptcy because they worry about legal stressors, are morally opposed to bankruptcy or have concerns about their reputation. However, the bankruptcy process is a lifeline for many who are buried in debt.

Looking at the link between unemployment and debt

Unemployment can result in many different financial challenges. Sometimes, people rack up credit card debt to pay monthly bills such as rent or to buy groceries. Those who are out of work for long periods of time and owe child support often fall behind on their obligations and some people have an especially difficult time with respect to health care, especially if they lost their insurance.

Looking into your options with regard to bankruptcy

There are different strategies when it comes to filing for bankruptcy. Depending on your circumstances, Chapter 13 could help, but in some instances, it is smarter to file for Chapter 7. Go over the ins and outs of each option and understand the ways in which bankruptcy will affect your life. From repayment plans to parting ways with certain assets, there are many issues to explore as a result of the bankruptcy process.