Many people who consider filing for bankruptcy have no income. That may specifically be the reason why they’re considering bankruptcy in the first place. For instance, maybe they had a good job and were earning a high wage, so they took out loans or made purchases on credit. When they lost their job, all of that debt suddenly became unaffordable.
But there are others who may be looking to address their debt, even though they’re still working. You may be in a position where you feel like the debt you have isn’t necessarily affordable. You do have an income, but that doesn’t mean you can pay the bills, and you want the debt relief that comes with bankruptcy. Are there still any options for you?
Chapter 13 bankruptcy
The biggest thing to remember is that there are two main types of bankruptcy that consumers can use. The first is Chapter 7, which liquidates nonexempt assets and then forgives the remaining debt. Many people who file for Chapter 7 do not have an income.
However, you could also use Chapter 13 bankruptcy, often known as a wage earner’s plan. Rather than liquidating assets and forgiving debt, this plan reorganizes the existing debt into a repayment plan. You may then have five years to make monthly payments and resolve the debt. This could make things affordable for you because it gives you longer to make those payments, providing you with the financial relief you’re looking for – even if you’re earning too much to qualify for Chapter 7.
As you can see, it’s very very important to understand all of the league options you have when facing financial hurdles.