Although filing for bankruptcy can provide significant relief from the heavy burden of debt, it does come with at a cost. From the work of gathering documents and meeting deadlines through to the liquidation or repayment process and discharge of your case, bankruptcy is a long and detailed process. If you are thinking about filing for bankruptcy, here is a basic guide of what happens after you have filed for bankruptcy.
Hire A Bankruptcy Attorney Before You File
The best thing you can do to ensure a successful outcome of your bankruptcy filing is to hire a bankruptcy attorney that specializes in bankruptcy law and has extensive experience with your state’s bankruptcy court. Their knowledge and expertise will be an invaluable asset as you navigate through the process from the first initial consideration through to the end of your case.
A bankruptcy attorney can ensure that all paperwork is filled out properly and submitted as required. They can also provide sound legal advice and guidance that will help you to make the best decisions for your personal financial situation. Bankruptcy lawyers have extensive experience with a wide range of bankruptcy cases and situations making them an invaluable asset throughout the detailed process including hearings, deadlines, and more.
What Happens After Filing For Bankruptcy?
After you have carefully filled out, reviewed, and signed all necessary paperwork for your bankruptcy case, your bankruptcy attorney will make sure that your case is filed on time and accurately under the preferred method for your state. After your petition and all necessary documentation are received, your case will be thoroughly reviewed. A clerk of the court will check to make sure that you have filled out all paperwork correctly and that all necessary documents and information has been submitted. If it is found that something is missing or incorrect, you will receive a notice of deficient filing and you will have to act quickly to comply with court deadlines in order to avoid having your case dismissed.
At this time you are also assigned a trustee who becomes responsible for managing and monitoring your case. If you filed for Chapter 7 bankruptcy, your trustee will be responsible for the liquidation of your non-exempt possessions and distributing those funds to creditors. If you filed for Chapter 13, your trustee will be responsible for overseeing your repayment plan and ensuring that you are first and foremost making your payments and then distributing those payments to individual creditors.
After you have filed for bankruptcy, an automatic stay goes into effect that will stop all creditors from taking collective actions against you. This includes phone calls, letters, wage garnishments, foreclosures, or any other attempts to collect on your debt.
After you have filed, you will also be required to be attend a number of different hearings throughout the duration of your case. The first of which is a meeting of creditors at which creditors are give the opportunity to ask you questions under oath or even object to your bankruptcy filing.
After filing, you will also be required to participate in a financial management or credit counseling course. This course is designed to help you determine if bankruptcy is truly the right choice for you, but also provides you with key information to help you avoid being in this situation again.
Once you have satisfied all necessary requirements, the liquidation process or repayment period will begin. Liquidations typically are completed within 6 months, while repayment plans last for 3 to 5 years. At the completion of your individual plan, the court will review remaining debt and decide what can and will be discharged. Once your discharge is issued, your credit report will show zero balances on your debt. Bankruptcy will provide an initial negative impact on your credit score and it will also remain on your credit report for 7-10 years, but you will be able to take steps in repairing your credit during this time.
Bankruptcy may come at a cost, but the opportunity to be free from debt makes it worthwhile.