What Happens After You File for Bankruptcy?
Did you just file for bankruptcy? Not sure what’s going to happen next?
Filing for bankruptcy is a difficult but sometimes necessary decision to make. Maybe you’ve had to file because of divorce.
Once you’ve submitted all of those papers, it may feel like it’s time to play the waiting game.
Navigating bankruptcy doesn’t have to be confusing or unpredictable. It is possible to find support as you go through this time and answers to the questions you have.
Read on to learn about what happens after you file for bankruptcy so that you can feel prepared for the future.
1. Types of Bankruptcy
What happens after you file for bankruptcy can depend on what type of bankruptcy you file for–Chapter 7 or Chapter 13. However, the steps in this post are generally applicable to both.
Chapter 7 bankruptcy is for individuals with little to no income or assets. It is essentially a liquidation bankruptcy that gets rid of all debts.
Chapter 13 bankruptcy is for individuals with the financial or property means to pay back part of their debts. It involves a repayment plan and is often referred to as reorganization bankruptcy.
The main difference between the two types of bankruptcy is whether or not individuals get to keep property. Chapter 7 bankruptcy liquidates all assets while Chapter 13 enables people to keep their property and participate in a payment plan to pay off debt.
2. Your Case Is Assigned a Number and a Judge
After you file for bankruptcy, your situation immediately becomes a case in the eyes of the law. This means that your case will be given a case number–just like a medical claim number–and will also be assigned a trustee and a judge.
Your case number is very important. Once you do receive it, it’s important to have it on hand at all times. You will be able to give this case number to any creditors who come knocking–they won’t be able to hound you the moment that your bankruptcy filing becomes a case due to the law of automatic stay.
Throughout the extent of your case, creditors and other financial institutions won’t be able to contact you because of automatic stay. They will have to speak with the court itself if they want to have a conversation.
Your trustee will be an important contact. He or she will be asking you the majority of questions during your court appearances.
You will likely already have an attorney at this point, such as a Stone Law Firm Columbia bankruptcy lawyer. He or she will be essential after you file for bankruptcy.
3. The Creditors Meeting Date is Set
After you file for bankruptcy and receive your case assignation, a date for your creditor’s meeting will be set. Any of your creditors can come to this court meeting.
The creditors meeting will give the trustee a chance to walk you through a series of questions. It also permits any creditors to ask you any questions.
Typically, the date for this meeting will be set for one to two months after you file for bankruptcy. Sometimes this date can change, however, given the busy court schedules.
4. Your Attorney Steps In
In the interim between your filing and first court appearance, your attorney will take the reins for a while. He or she will take care of some necessary paperwork and communications.
This includes communicating with the trustee for your case, making sure all documents are in order. Your attorney will also make sure that any other attorneys involved in your situation are aware of the case and that any ongoing lawsuits cease.
Most importantly, your attorney will appraise all property and assets you own. If you are filing a Chapter 7 bankruptcy, this property may be sold to pay back creditors.
Your attorney will also have a conversation with you about the types of questions your trustee will ask you at the creditors meeting, so you can feel confident in how you’ll answer.
5. You Attend the Creditors Meeting
Most creditors meetings don’t involve any creditors. You’ll appear in court and answer the trustee’s questions, many of which your attorney will have briefed you on beforehand.
Make sure you request a full day off at work for your hearing and make any arrangements to be in court for as long as you can.
If any creditors come to your meeting, you’ll also have to answer questions they pose to you.
Generally, the trustee will be able to close your meeting after asking you questions. This means that you won’t have to appear in court again.
6. The Case May be Adjourned
In some cases, your case will be adjourned. This happens when the trustee needs more information in the form of documents from you and your attorney. Your case will then have a second hearing, but you likely won’t have to appear in this one.
In general, most cases are closed after the first hearing, especially if your attorney has covered all of your documentation beforehand.
7. You Obtain a Discharge
Once your case is closed, you’ll be given notice that you will be discharged within sixty days. Between the date of your discharge and your first hearing, you’ll have to undergo one more counseling session.
Your discharge means that you have a fresh financial horizon ahead of you. Your creditors, employers, and other attorneys involved in lawsuits will be notified immediately via mail.
In general, you can expect to be discharged between three and five months after you file for bankruptcy.
If you’ve filed for Chapter 13 bankruptcy, your discharge will occur after you’ve fulfilled a repayment plan. This can be in the form of years following your filing for bankruptcy.
8. Time to Begin Again
After you obtain a discharge, it’s time to breathe easy. You can rebuild credit and take control of a new financial future.
Discharged individuals often engage in financial counseling to ensure they can navigate life after bankruptcy with confidence.
What Happens After You File For Bankruptcy
Bankruptcy may always feel unexpected, but you don’t have to navigate it alone. After you file for bankruptcy, you can expect a clear path with a clear outcome.
Once you file your bankruptcy papers, your case will be assigned a number and a trustee. Your attorney will help you prepare for a court hearing and also assess your property values. Most individuals filing for a Chapter 7 bankruptcy can expect to be discharged within three to five months after filing.
Following discharge, individuals are free to begin again financially.
At Halt.org, you can browse our extensive attorney directory so that you can find the bankruptcy attorney you need to navigate this time. Learn more about us or start browsing today.