NYS Department of Labor unemployment bankruptcies - how filing affects my weekly claims
I'm in a really tough spot and need some advice. I've been collecting unemployment for about 8 weeks now and my lawyer is telling me I should file for bankruptcy because of all the debt I accumulated before losing my job. I'm scared this will mess up my unemployment benefits somehow. Does anyone know if the NYS Department of Labor will stop my weekly claims if I file bankruptcy? I can't afford to lose this income right now but I also can't keep dodging creditors. Has anyone been through this situation before?
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Brianna Schmidt
Bankruptcy and unemployment benefits are completely separate issues. The NYS Department of Labor doesn't check your bankruptcy status when processing weekly claims. Your UI benefits are based on your work history and job separation, not your financial situation. However, you should know that unemployment benefits are considered income in bankruptcy proceedings, so you'll need to report them to your bankruptcy attorney.
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Andrew Pinnock
•Thank you so much! That's a huge relief. My attorney did mention I'd need to list the unemployment income but I was worried NYS Department of Labor would somehow find out about the bankruptcy and cut me off.
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Alexis Renard
yeah i went through bankruptcy while on unemployment last year and it didnt affect my weekly claims at all... just make sure you keep certifying every week like normal
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Camila Jordan
One thing to watch out for - if you have any garnishments on your bank account, you might want to ask your attorney about protecting your unemployment deposits. Some people open a separate account just for their UI benefits to avoid complications during the bankruptcy process.
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Andrew Pinnock
•That's really smart advice. I do have one creditor threatening garnishment so I'll definitely ask my lawyer about setting up a separate account for the unemployment money.
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Tyler Lefleur
•Wait, can creditors actually garnish unemployment benefits? I thought those were protected income?
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Camila Jordan
•Unemployment benefits themselves are generally protected from garnishment in New York, but once they're deposited in your bank account they can get mixed with other funds and things get complicated. That's why a separate account helps.
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Madeline Blaze
The whole system is so messed up that people have to choose between getting help with debt and keeping their unemployment! I filed bankruptcy three years ago and it was the best decision I ever made, even though it was scary at first.
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Max Knight
I had to deal with something similar when I couldn't get through to NYS Department of Labor to ask about this exact question. The phone lines are always jammed and I was getting stressed about missing something important. I ended up using this service called Claimyr that actually got me connected to a real person at NYS Department of Labor within like 10 minutes. They have a website at claimyr.com and there's even a video demo showing how it works at https://youtu.be/qyftW-mnTNI. The agent was able to confirm that bankruptcy doesn't affect unemployment eligibility at all.
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Emma Swift
•Interesting, never heard of that service but sounds like it could be helpful when you need to actually talk to someone at NYS Department of Labor instead of just hoping they call you back.
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Emma Swift
Just wanted to add that if you're worried about any part of this process affecting your unemployment, you can always call NYS Department of Labor directly to confirm. But honestly, bankruptcy is a financial fresh start and shouldn't interfere with your right to collect benefits you've earned through your work history.
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