Bankruptcy and Unemployment -- Filing While Jobless

Filing Bankruptcy While Unemployed

Unemployment can actually make bankruptcy easier in some ways:

• Means test: Lower income makes you more likely to qualify for Chapter 7. The means test uses 6 months of income, so the longer you have been unemployed, the lower your average.
• Unemployment benefits: Most states exempt unemployment compensation from creditors. Check your state's exemption laws.
• Filing fee waiver: If your income is below 150% of the federal poverty guideline, you can request a fee waiver for Chapter 7 (Form 103B).
• No garnishment risk: Without wages, creditors cannot garnish your income -- but they can still levy bank accounts and file liens.