The Coronavirus or COVID-19 resulted in hundreds of thousands of employees in Los Angeles being furloughed. These furloughs have resulted in reduced income for individuals in Los Angeles. The debt of the same individuals has also increased substantially as the only way to pay for essential things when no income is received is though the use of a credit card. In this article, we discuss how being furloughed affects the filing of a bankruptcy in Los Angeles, CA.

What Does Being Furloughed Really Mean?

Simply put, a furlough is an employer-mandated, temporary unpaid leave from work. Employers typically resort to as a cost-saving measure especially in times like the time when Coronavirus hit. Employees in Los Angeles can be furloughed for as short a time as a few weeks, or as long as months. During this forced-leave, employees often retain their health-insurance benefits, but that is not guaranteed.Unlike a lay-off, being furloughed still means that the employee is employed by the employer.

How Does Being Furloughed Affect the Filing of a Bankruptcy in Los Angeles

As explained above, the furlough of thousands of employees in Los Angeles as a result of the Coronavirus will almost certainly result in an increase in bankruptcy cases, since individuals are not receiving income that they received prior to the furlough. With Chapter 7 bankruptcy cases, income is extremely important (as it is with other bankruptcy chapters) and is determinative on whether one would qualify for the Chapter 7 bankruptcy.

The reduction in income could result in some individuals in Los Angeles being able to qualify for a bankruptcy if they have not worked for several months or if they are ultimately laid off (after being furloughed). On the other hand, a furlough could affect one’s elegibility to qualify for a chapter 13 bankruptcy, which relies heavily on the debtor’s ability to work and generate sufficient income to reorganize debt.

In bankruptcy cases that we have filed in Los Angeles since the Coronavirus pandemic, we have provided information in the bankruptcy documents filed in the Court informing creditors, the court, the Trustee, etc. that the debtor has been furloughed. Our attorneys understand that it is an extremely sensitive and stressful time for individuals who were furloughed, and we are here to provide some calm to those individuals who have large amounts of debts in Los Angeles.

Contact Our Los Angeles Bankruptcy Attorneys to Determine if Your Are Eligible for Bankruptcy

If you are considering bankruptcy but do not know if you are eligible, give us a call now and let’s discuss your bankruptcy options. We would be happy to talk to you and provide you with all of your options in confidentiality. Contact a Los Angeles Bankruptcy Attorney now!

Call us now at (310) 444-9444 for a FREE CONSULTATION!