While not as common, the situation occurs every so often that an individual doesn’t have a job and files Chapter 7 bankruptcy and needs to seek employment during the 3-4 months it typically takes for the bankruptcy process to finalize. While it seems counter-intuitive on some levels to wait until the Chapter 7 bankruptcy process is finalized, it may be the best option.
Chapter 7 Bankruptcy
In order to qualify for Chapter 7 bankruptcy, you must either make less than the Ohio median income level for a similar family size or be insolvent. If at any point during the Chapter 7 bankruptcy process you must report this to the bankruptcy trustee that is handling your bankruptcy case. If you fail to notify the bankruptcy trustee of any changes in income it could have detrimental effects with the worse being having your bankruptcy dismissed with cause, and possibly even criminal proceedings.
The Case for Waiting
Since the Chapter 7 bankruptcy process in Ohio, like most states, can take as little as 4 months, if you don’t already have a job, it’s probably best to wait until the process is over until obtaining a new job. While it may be the case that you cannot wait due to extenuating circumstances, waiting will prevent your bankruptcy period extending up to 5 years.
Timing Important in Bankruptcy
Even if you’ve just lost your job, it may not be the best strategy to immediately file bankruptcy. Because the income portion of your Ohio bankruptcy petition takes into account the previous 6 months of income, a high paying job could cause your Chapter 7 bankruptcy case to be denied, leaving you to either file Chapter 13 bankruptcy or to wait until your previous 6-month average income lowers. Contact a Dayton, OH bankruptcy attorney to find out the best time for you to file for debt relief based on your individual situation.