How Does Unemployment Affect Chapter 13 Bankruptcy?

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  2. How Does Unemployment Affect Chapter 13 Bankruptcy?
How Does Unemployment Affect Chapter 13 Bankruptcy

Over the past year and a half, we have faced a lot of uncertainty over health and financial issues. For some of us, the threat of unemployment became a reality. When you are struggling with overwhelming debt and unemployment, it’s hard to know where to turn. Chapter 13 bankruptcy might help some people, but will unemployment affect Chapter 13 bankruptcy filers? This article should provide some answers to your questions. But it’s still important to talk to an attorney if you are considering bankruptcy as a way to get back on your feet financially.

Filing for Chapter 13 Bankruptcy While Unemployed

Job loss is actually a leading cause of bankruptcy. That’s only natural since debt tends to become overwhelming when people suddenly don’t have an income. But can someone on unemployment file for Chapter 13 bankruptcy?

The answer is you can still file a Chapter 13. Your unemployment payments may be included in the disposable income calculation. In a Chapter 13 bankruptcy, disposable income is your income reduced by the amount needed to support you and your dependents, if any. You may also deduct up to 15% of your gross income for charitable contributions.

Monthly unemployment payments typically are less than your wages. This is usually not a problem.

Will Unemployment Affect Chapter 13 Bankruptcy Repayment Plans?

Maybe you have already filed for bankruptcy and set up your repayment plan. Will your unemployment affect your Chapter 13 bankruptcy repayment plan? Generally, the following solutions are possible:

  • Continue making your payment as it is currently set up.
  • If your unemployment is less, your plan can be modified and possibly reduced if you are willing to give up a car or other item in the plan.
  • Ask for a Chapter 13 Hardship discharge if you meet the qualifications.
  • You might be able to convert your Chapter 13 bankruptcy to a Chapter 7. Always talk to your attorney before deciding on conversion because it might not have the results you want. For example, you might have to sell non-exempt property to pay some of your remaining debts.

Filing for bankruptcy is a big step that can be challenging even if you are employed. Unemployment can further complicate the process.

We’d Like to Talk with You About How Unemployment and Chapter 13 Bankruptcy.

We can help you review your financial situation and explain your options under bankruptcy law.

Attorney Leslie Craft has the experience you need to deal with bankruptcy and traffic violations. Ms. Craft’s goal is always to help her clients get past their legal problems and get on with their lives. Consultations are free and only take about 30 – 45 minutes of your time. Your options may surprise and even excite you!

To schedule a free personal consultation, call Craft Law Offices at (252) 752-0297 or email us at My offices are located in Greenville, Morehead City, and Rocky Mount for your convenience. I also represent clients in surrounding Eastern North Carolina communities, including Warrenton, Elizabeth City, Roanoke Rapids, Goldsboro, and Jacksonville.

Bankruptcy Doesn’t Have to Be a Painful Process.

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