Can I file for Chapter 13 if I'm unemployed?

If you're out of work, you probably won't be able to use Chapter 13 if you want to file for bankruptcy. In Chapter 13, you agree to a repayment plan, to last three to five years (depending on your debts, income, and assets), to pay off some or all of your debt.

A Chapter 13 repayment plan must pay certain debts (such as child support and back taxes) in full. It must also pay your unsecured creditors at least what they would have received if you had used Chapter 7. In Chapter 7, these creditors are paid from the proceeds of selling any nonexempt property you own. (For information on exemptions, and links to each state's exemption protections, see Bankruptcy Exemptions - What Do I Keep When I File for Bankruptcy?)

If you don't have the income to pay at least these minimum amounts required in Chapter 13 -- plus the administrative costs of your case, such as the filing fee and the trustee's fee -- then the judge won't allow you to use Chapter 13. If you're unemployed, it's unlikely you'll be able to fund a Chapter 13 repayment plan.