Tap to Call - (877) 250-8242

10 Year Itch: What Happens During the Bankruptcy Process

Share this article



Bankruptcy is a legal procedure that relieves eligible individuals of debts they are unable to repay. A bankruptcy can remain on your credit report for up to 10 years.

The timeline below provides information on how the process works, and tips on recovery during this time.

What happens during bankruptcy process graphic

Embed the infographic above with the HTML below

*Please use the above code unaltered or include a citation of this site as the original source.


10 Year Itch

What Happens During the Bankruptcy Process

Bankruptcy is a legal procedure that relieves eligible individuals of debts they are unable to repay. A bankruptcy can remain on your credit report for up to 10 years. This timeline provides info on how the process works, and tips on recovery during this time.

Within 180 Days Before Filing

Pre-Bankruptcy Counseling. Time: 60-90 min. Average cost: $50, or free if waived.

Most people filing for bankruptcy protection must get credit counseling for a government-approved organization.

This usually includes:

  • evaluating your financial situation
  • reviewing bankruptcy alternatives
  • creating a personal budget plan

Filing Bankruptcy

Two Chapters. There are two types of bankruptcy commonly used by individuals: Chapter 7 and Chapter 13.

Chapter 7 is known as "total" bankruptcy and stays on your credit report for up to 10 years. You non-exempt property may be turned over to the trustee for liquidation.

Chapter 13 is known as "reorganization bankruptcy" and stays on your credit report for 7-10 years. Your non-exempt property is protected during a 3-5 year debt repayment plan.

Immediately After Filing

Automatic Stay. Prevent repossession of property, bar IRS collection activities, prevent eviction, prevent or pause foreclosure proceedings, halt wage garnishments.

An automatic stay is issued by the court to protect the filer from collection activities during the bankruptcy process.

1-2 Months After Filing

Meeting with Creditors. Time: 1 hour or less. Cost: N/A (may include attorney's fees).

You must attend a meeting with your creditors to discuss the bankruptcy. All of the property that you have not claimed to be exempt may be given to the bankruptcy trustee to sell in order to pay your creditors.

Federal Exemptions. (State exemptions vary.) Federal and state bankruptcy laws may provide for exemptions to protect property, such as: homes, vehicles, health aides, jewelry, retirement accounts, etc.

Amount needed for support is exempt: wrongful death funds, retirement benefits, alimony/child support, life insurance proceeds.

Unlimited exemptions: lost earnings payment, unemployment compensation, veterans benefits, Social Security benefits, public assistance, crime victims compensation, Disability, unemployment benefits, unmatured life insurance.

Before Discharge

Post-Filing Debtor Education. Time: about 2 hours. Average cost: $50, or free if waived.

Before your debts can be discharged, you must complete a debtor education course.

The course includes information on: developing a budget, managing money, and using credit wisely.

Discharge (3-4 months after filing Ch 7). Bankruptcy stays on credit report for 7-10 years

What You Need After Bankruptcy. MSN Money offers these tips for people recovering from a bankruptcy:

Credit report Clean-Up. Credit reports often improperly show closed accounts as open and over-due when they should be reported as closed from bankruptcy. You may need to contact the credit bureau to fix this problem.

Secured Credit Card. 2 types of credit can help improve your credit rating: Installment: these are big loans like auto loans and mortgages. Revolving: These are loans you often pay off monthly like credit cards. Remember not to charge more than you can pay off each month.

Look for the following in a secured credit card: No application fee and a low annual fee. Reports to the major credit bureaus (Experian, Equifax and TranUnion). After 12-18 months of on-time payments, the card should convert to an unsecured credit card.

Tap to Call - (877) 250-8242

PAID ATTORNEY ADVERTISEMENT: THIS WEB SITE IS A GROUP ADVERTISEMENT AND THE PARTICIPATING ATTORNEYS ARE INCLUDED BECAUSE THEY PAY AN ADVERTISING FEE. It is not a lawyer referral service or prepaid legal services plan. Total Bankruptcy is not a law firm. Your request for contact will be forwarded to the local lawyer who has paid to advertise in the ZIP code you provide. Total Bankruptcy does not endorse or recommend any lawyer or law firm who participates in the network nor does it analyze a person's legal situation when determining which participating lawyers receive a person's inquiry. It does not make any representation and has not made any judgment as to the qualifications, expertise or credentials of any participating lawyer. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. The information contained herein is not legal advice. Any information you submit to Total Bankruptcy does not create an attorney-client relationship and may not be protected by attorney-client privilege. Do not use the form to submit confidential, time-sensitive, or privileged information. All photos are of models and do not depict clients. All case evaluations are performed by participating attorneys. To see the attorney in your area who is responsible for this advertisement, please click here, or call 866-200-8052.

FLORIDA ONLY: Total Bankruptcy is considered a lawyer referral service in the state of Florida under the Florida Rules of Professional Conduct. By all other standards, Total Bankruptcy is a group advertisement and not a lawyer referral service.

If you live in Mississippi, Missouri, New York or Wyoming, please click here for additional information.

By an Act of Congress and the President of the United States, we are a federal Debt Relief Agency. Attorneys and/or law firms promoted through this Web site are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code. Disclosures Required Under the U.S. Bankruptcy Code.