David R. Black Bankruptcy Law Blog on Lawyers.com

What To Do After You Filed Bankruptcy

The actions that you take after you have filed for bankruptcy will be different depending upon the type of bankruptcy case.  Bankruptcy filers often do not go before a judge but do attend a meeting where the creditors have an opportunity to ask questions and gain information about the debtor. New laws now require filers to receive debtor education before debts can be discharged. After filing a bankruptcy suit you will want to give some thought to repairing your credit. 

In a Chapter 7 bankruptcy case some or even all of your debt may be discharged.  A court appointed trustee assumes responsibility for your assets and liquidates them to make distributions to your creditors. As a debtor, you are required to attend a meeting with your creditors and file a notice of intention regarding the disposition of your property.  In many Chapter 7 bankruptcy cases there are no non-exempt assets and the bankruptcy case serves only to discharge the filer’s debt which usually happens within just a few months after filing.

In a Chapter 13 bankruptcy case the debtor is required to come up with a plan for repayment of at least some of the debt. After you file a Chapter 13 bankruptcy case and attend the meeting with your creditors you will attend a plan confirmation hearing where the court will decide whether to approve your repayment plan. Once approved, you must make regular payments to your creditors under the plan for a period of 3-5 years.  Only after the debt obligation under the plan has been fulfilled will the debts be discharged.  Chapter 11 cases work in a similar manner to those of Chapter 13, except that Chapter 11 cases are for businesses and Chapter 13 cases are for personal bankruptcy.

Once you have filed a bankruptcy case you must complete a debtor education session and provide proof to the court before your debts can be discharged. You must provide proof that you received this training from a court approved agency. A debtor education course should include information on developing a budget, managing money, and the proper use of credit and is designed to help you avoid making further financial mistakes.

After bankruptcy you should take steps to rebuild your credit.  Open a savings account and become a consistent saver to show that you know how to manage your money.  Take out a small loan, using the savings account as collateral, then pay off the loan.  Establish credit with a utility company by putting up a security for several month’s service in advance. Next, apply for credit cards with low credit ceilings and pay them off each month.  Over time these strategies will show creditors that you are less of a credit risk and thus help to repair your credit standing.

The above information is provided courtesy of the Bankruptcy Legal Group, serving the Media and Philadelphia communities for over 30 years.

 Bankruptcy Legal Group   -    Toll Free (866) 491-6275   -   327 West Front Street Media, PA 19063