Can I File Chapter 13 Bankruptcy If I Am Unemployed?

Yes, you can still file for Chapter 13 bankruptcy protection if you are currently unemployed or become unemployed while you are in the repayment process.  Mainly you just need to have some source of income to maintain payments into the Chapter 13 plan, even at a reduced level. We welcome your questions about filing for Chapter 13 in Michigan.  Our firm specializes in helping Michigan residents find lasting debt resolution through filing Chapter 13 debt consolidation, Chapter 7 debt elimination or debt settlement.  Call today at 866-261-8282for a free consultation with a licensed attorney. Here are some various options as to how you might qualify to file Chapter 13 bankruptcy during a period of unemployment:  

The Chapter 13 Plan Considers Total Household Income

If you are currently in a Chapter 13 bankruptcy or considering a Chapter 13 filing and have experienced a loss of income, all hope is not lost.  Support from a spouse or family members and be used to qualify for the repayment program.  When we calculate the Chapter 13 plan, we look at total household income and total household expenses.  We simply need to show that there is adequate income coming into the household to cover the required plan payments. Just because a spouse is contributing income to the plan does not require that he/she also file.  An individual may have no personal income and still file a Chapter 13 plan as long as income is available in the household.  At the time of the free consultation we will discuss the pros and cons of filing jointly versus individually depending upon your personal circumstances, such as joint debt, creditor actions, etc.  

Filing Chapter 13 Bankruptcy:  Unemployment Income is Considered a Valid Income Source

If you are receiving unemployment benefits, that income can be used to fund a Chapter 13 plan.  There is no difference in the eyes of the court between a paycheck and unemployment benefits. Some people have seasonal work and receive unemployment income during the gap months.  Again, the consolidation plan does not discriminate on income sources.  

Modifying a Chapter 13 Plan

While in a Chapter 13 Plan, your income situation may change.  If the income should change, you may be able to modify the plan to allow it to change with your circumstances. In fact, this ability to reduce your debt payments during a time of restricted income could actually help you weather the storm without derailing your debt resolution efforts.  

Chapter 7 Bankruptcy for Debt Elimination

In some cases, a loss of income due to unemployment may be too severe to continue a Chapter 13 Plan.  If the income situation no longer allows you the ability to fund a Chapter 13 plan you may be able to convert your case to a Chapter 7 Bankruptcy.  Our qualified attorneys can make this evaluation at any time during the Chapter 13 process to determine if converting the case may be right for you based on your current circumstances and long term goals.  

Call Acclaim Legal Services Today for Free Advice

We understand that the loss of a job or shifts in income can be a challenging time.  We are here to help make this transition more bearable.  Call us today at 866-261-8282 for a free consultation or schedule a consultation online.