People may experience many proverbial “ups and downs” in life. Someone who runs into significant financial troubles could find debt proves crushing. Current income and saving levels may not be enough to cover obligations, so filing for bankruptcy becomes an option. Things may pick up when an Illinois worker lands a new job. Maybe the person went some time without employment. Perhaps the new job offer comes with higher pay. Either way, the new employee may wonder if the job change affects bankruptcy protections.
New jobs and filing for Chapter 7
Chapter 7 bankruptcy is a process where specific assets face liquidation to satisfy creditors. Some remaining debt is then discharged. To qualify for Chapter 7 bankruptcy, a person must pass a means test. Failing the means test doesn’t leave the individual to the mercy of creditors, as Chapter 13 bankruptcy and its payment plan solution could be possible.
When landing a new job, the employee may wonder if the salary results in failing the means test. Each case is different, but a new job and a higher salary do not automatically lead to failing a means test.
Employment and a means test
Income factors into means testing, but there are other elements that come into consideration. The bankruptcy court may look at several years of income, for example. A present-day income level might not offset financial problems derived from months or years of unemployment or underemployment.
Expenses play a role in a means test. Although someone may earn a decent salary, clothes, rent, child care, medical issues, and other obligations could strain finances. Those expenses come into play in the means test.