What Happens When You File For Bankruptcy?

If you are facing a financial low point, whether due to losing your job or facing a medical emergency that has drained your savings, you may have considered filing for bankruptcy in order to get back on track. If you have consulted with or retained the services of a reputable personal bankruptcy lawyer, you have no doubt received the guidance needed in this trying time. If not, you might wonder what happens after you file. Do you automatically lose everything you have owned – your home, your car, your other possessions – and are you unable to apply for credit? It is important to know what will happen so that you will be prepared mentally.

So let’s say you have worked with your lawyer and filed for bankruptcy. The petition is sent, and your lawyer will advised on what rights you have. Here is what typically happens next:

1) The bankruptcy court dealing with your case will inform your creditors – the organizations and people to whom you owe – that you have filed for bankruptcy and that you are scheduled to attend your first hearing. Your creditors will be given the time and place as well – this may occur a month or so after filing.

2) In the meantime, your creditors will be unable to collect from you after you have filed. This means they cannot try to repossess property or force you to pay. There may, however, be exceptions, and your lawyer will discuss the possibilities with you.

3) This first hearing, known as the First Meeting of Creditors, is mandatory for you to attend. A trustee appointed to oversee the progress of your case will meet with you and your lawyer to ask questions about your filing. You may give a history of your financial problems and talk about your assets and debts here.

4) Depending on whether you have filed for Chapter 7 or Chapter 13, the results of your petition will vary. If you meet all the requirement for bankruptcy, you could be approved in about two months. Again consult with your lawyer for details.

Know, though, when you do file for bankruptcy it will appear on your credit reports for about ten years. You may still apply for credit, but terms will differ from when you had credit before you filed. When your case is discharged, you may need a co-signer to help you establish credit again.

The more you know about what happens after bankruptcy can help you understand the process and what to do to survive it.

Kathryn Lively is a freelance writer specializing in articles on Norfolk bankruptcy lawyers and Virginia bankruptcy lawyers.

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