Will You Lose Unemployment Benefits if You File for Bankruptcy?



Will You Lose Unemployment Benefits if You File for Bankruptcy? 

Unemployment and the benefits that come with it has become a lifeboat for Floridians, especially during the COVID-19 pandemic and the struggling economy. Millions of Florida residents have filed for unemployment at least once since the beginning of the pandemic shutdowns in March of 2020.

One of the biggest worries those have about filing bankruptcy is losing property. This can be possible if you file for Chapter 7 bankruptcy without an attorney skilled in identifying and applying exemptions on behalf of the client. In some instances, trustees can convert non exempt assets, including money in a bank account, for the benefit of creditors. However, fortunately for those who receive unemployment, these types of benefits can be exempt from creditors. 

Also, it is important to understand that receiving unemployment benefits does not keep you from qualifying for Chapter 7 bankruptcy. In fact, it may help you become more eligible due to the types of income calculations that are involved in qualifying for a Ch. 7 bankruptcy. 

Florida Law in Chapter 443 Section 051 states that unemployment benefits are not alienable, which means they can’t be attached, assigned, or encumbered. This exemption applies to the unemployment benefits that are paid under Florida state law, additionally with those benefits that are payable according to federal law. Therefore, any benefits you have received from unemployment can be safe if you file for bankruptcy.

We at the Wynn Lawn Firm are committed to helping our clients understand all of their options when faced with a challenging financial situation. We can help you determine and evaluate what makes the most sense for your case. With over 40 years of experience in creatively and efficiently addressing the needs of every client who walks through our doors, our team is ready and willing to analyze your situation. This dedication and experience allows us to address any type of possible bankruptcy need you may have regardless of how simple or complex it may be. Call us today to see for yourself the relief and protection that bankruptcy can provide to your situation.

Print Story      Email Story