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  • Writer's pictureJaini Morkhiya


Updated: Apr 15, 2021

The financial toll caused by the coronavirus outbreak is undeniable. Thousands have experienced layoffs due to business slowdowns and, as a result, employers have been unable to keep all of their workers.

Because of this, many households are experiencing drastic losses of income and having to stress about paying all of their expenses. If you’re using your credit card for necessary expenses just to get by, you will most likely run into a problem.

After a layoff, your financial situation may cause you to wonder whether filing for bankruptcy is in your best interests. Below, we discuss how to go about filing for bankruptcy after being laid off.

Deciding When to File

Timing is important when filing for bankruptcy. There are two options for filing for bankruptcy in California: Chapter 7 and Chapter 13. With Chapter 7 bankruptcy, you most likely won’t have to repay any of your debt, while with Chapter 13, you are required to pay back a certain portion of your debt.

Courts will look at your income over the last six months to determine which type of bankruptcy you qualify for. If you make above a certain amount, they will probably have you file Chapter 13 because you have the financial resources to pay back some of your debts. If you make below a certain amount, they will probably have you file under Chapter 7.

If you recently took a pay-cut because of a layoff, you may qualify to file for Chapter 7 simply by waiting a few months. That way, when the courts look at your income over the last 6 months, your previous work income is not considered, and your current situation is taken into account in its entirety.

Every Situation Is Different

There is no one-size-fits-all approach when it comes to bankruptcy. We understand that your situation is different from someone else’s situation. Because of this, you need legal representation that will provide you with a unique and personalized legal strategy to get you to a place where you feel financially secure.

At US Legal Group, APC, we have the skills, dedication, and experience you need to resolve your debts. We are here to stand by your side and address any concerns or questions you may have along the way.

Contact our team at (714) 921-5226 to learn more about your legal options. We are providing phone consultations and remote legal services during the coronavirus outbreak.

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