Can you file chapter 7 bankruptcy if you collect unemployment benefits?

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Question:

Can you file chapter 7 bankruptcy if you collect unemployment benefits?

Answer:

You will almost certainly be able to file for Chapter 7 bankruptcy while collecting unemployment. To be eligible for Chapter 7, you must pass the means test. You pass if your average income over the six months before you file is less than the median income for a household of your size in your state. Even if your income exceeds the median, you still pass the means test as long as your disposable income (what's left after paying allowed expenses) is less than a minimum amount set by law. 

If you have been receiving unemployment benefits for at least a few months before filing for bankruptcy, chances are very good that your income is less than the state median. Even the most generous state unemployment rates won't push your income past the median level, unless you have significant income from other sources. 

This site does not provide legal advice and users of this site should not interpret any of the information presented here as legal advice. The information provided merely conveys general information related to commonly asked legal questions. We are not a law firm and the employees responding to questions are not acting as your legal attorney. You should ultimately consult with a lawyer for your case.

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