Can I File for Bankruptcy If I'm Unemployed?

unemployed lady

As long as you meet the eligibility criteria for bankruptcy in Florida, you can petition the court for debt relief. Losing a job can be a challenging time, and the financial burden that follows can make it even more difficult. If you find yourself unemployed and drowning in debt, you may be wondering if filing for bankruptcy is an option for you.

Fortunately for those struggling with debt after becoming unemployed, having a job isn’t a requirement to qualify for either Chapter 7 or Chapter 13 bankruptcy. That said, any unemployment benefits you receive count as income for the purposes of assessing your eligibility for Chapter 7 bankruptcy. This assessment is conducted via a means test, which we’ll explain in more detail before.

The Chapter 7 Means Test

The means test is an evaluation of your income and family size that determines whether or not you qualify for Chapter 7 bankruptcy. If your income for the six most recent months is below the median income for your family’s size in your state, you can pass the means test – even if some or all of your current income comes from unemployment benefits.

As an example, the Florida median incomes between April 1, 2023, and May 14, 2023, were assessed as follows:

  • 1 Earner: $60,429
  • Family of 2: $74,131
  • Family of 3: $83,396
  • Family of 4: $100,476

If you were to file for bankruptcy during this period and your income (correlating with your family size) was less than these values, then you could potentially qualify for Chapter 7 bankruptcy.

Unemployment Benefits & the Chapter 7 Means Test

Receiving unemployment benefits can help you qualify for bankruptcy when you might not have previously qualified, but they can also disqualify you from bankruptcy if you receive too much in benefits.

For example: If you are considering Chapter 7 immediately after losing your job, and your income for the six most recent months would cause you to fail the means test, you may become eligible for bankruptcy if you wait to file. This may be possible when your unemployment benefits are lower than your previous employment earnings.

Keep in mind, however, that the opposite may also occur. If you are paid unemployment benefits that somehow exceed what you were previously earning, these can push you over Florida’s median income and disqualify you from Chapter 7 bankruptcy.

Contact Us to Learn More

If you are unemployed and have concerns about how to deal with debt in your situation, you can always turn to Buchalter & Pelphrey Attorneys At Law for help. Our experienced bankruptcy lawyers can provide the legal advice and services you require to pursue debt relief.

Learn more during a consultation with us – contact Buchalter & Pelphrey Attorneys now to request one!

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