Most people don't walk directly from the unemployment office over to file their bankruptcy petition but with the unemployment situation the way it is in the United States right now it might not be a bad idea for some people to do just that.
Will it apply in my case?
Every situation is unique so there is no rule of thumb when considering bankruptcy after a job loss, speaking to a Chicago bankruptcy attorney can discuss with you the benefits of bankruptcy and help determine the most opportune time to file a bankruptcy claim. But the following information is a useful starting point if you're weighing the options ahead of you.
Whats the first step?
The first thing you should do is sit down with your bankruptcy attorney and look at your priorities. If you're worried about your mortgage and want to avoid late payments and possibly a foreclosure then filing a Chapter 13 bankruptcy soon after losing your job is probably a good idea. Chapter 13 bankruptcy does not discharge your debts, not all of them anyway, it's more like a consolidation plan that takes all of your bills and prioritizes them and then arranges a manageable monthly payment plan.
Immediately once you file your Chapter 13 bankruptcy petition an automatic stay goes into effect which prevents your creditors from attaching late fees, pursuing collection activities, and even from foreclosing on your home. Filing a Chapter 13 immediately after you become unemployed will let you take charge of your situation and help you save your home from late fees and foreclosure.
What will be affected?
If the majority of your debt lies in unsecured lines of credit, mainly credit cards, then a Chapter 13 bankruptcy probably doesn't make a lot of sense, instead you'll want to file a Chapter 7 bankruptcy. And, in most cases, you're going to want to wait at least six months after you become unemployed to file. A Chapter 7 bankruptcy, unlike Chapter 13 bankruptcy, is not a payment plan, it discharges your debt, or basically erases it.
To qualify for a Chapter 7 bankruptcy you have to complete a means test which reviews your income over the previous six months. If you were employed during that time period it may be difficult to pass the test, but if you were unemployed it should be fairly easy to qualify for a Chapter 7 bankruptcy, again ask for your attorney to request what you need to do to determine if you qualify..