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Filing for bankruptcy after losing your income

| Dec 9, 2020 | Uncategorized

Our ability to earn an income is how we keep a roof over our head, provide for our family, and afford to enjoy the nicer things in life. Many people derive their self-esteem from their income and the fact that they feel useful and needed in their work. Therefore, for obvious reasons, losing your job or source of income unexpectedly can affect every aspect of a person’s life.

When a person has a significant amount of outgoings, such as rent, grocery bills and gas payments, losing their income could mean that they go into debt quickly. For those already dealing with some debt, it can lead their situation to spiral out of control if action is not taken quickly.

If you have lost your income this year and you are worried about the debt you have been accumulating, you should not simply ignore this. Make sure that you understand the different options that you have before pursuing any debt relief initiative. You may believe that you are ineligible to file for bankruptcy because you do not have an income, but this fact alone will not hinder your efforts. The following is an overview of how filing for Chapter 7 bankruptcy could help those with no income.

No repayment plan in Chapter 7 bankruptcy

Chapter 13 bankruptcy is often referred to as a wage earner’s plan because it requires a steady income so that debt can be paid off in three to five years. However, Chapter 7 bankruptcy does not require that you earn an income. Instead, it involves the liquidation of assets.

You can get a fresh start quickly

While you will need to liquidate some of your assets, it’s likely that all of your debts will be written off in a matter of months. This is why Chapter 7 bankruptcy is a popular choice – it offers a fresh start quickly.

If you are struggling financially because of a loss of income, take action to discover whether Chapter 7 bankruptcy is right for you.