When you’re deciding whether it makes sense to file for bankruptcy, there’s a lot to consider. Of course, you’ll want to understand how Chapter 7 or Chapter 13 will benefit you. But it doesn’t end there. It’s also important to know what to expect afterward. Here’s what happens after bankruptcy.
Your new life begins after the court notifies your creditors that you received a discharge order wiping out your qualifying debts. Those creditors won’t be able to sue you, garnish your wages, attach your bank account, call you, or send you mail about the forgiven balances. You’ll get your fresh start.
Be aware, however, that it’s not uncommon for a creditor to inadvertently attempt to collect a debt that was forgiven as part of your bankruptcy. If that happens, here’s what to do: Keep your bankruptcy paperwork handy. Most will stop calling once you give them the case number, filing date, and discharge date. If the calls persist, notify your attorney.
Most people understand that their credit will take a hit for a time after bankruptcy—and there’s no denying that the change will likely affect your financial life. Your credit report tells creditors, employers, insurance companies, and potential landlords about your finances and they use the information to determine whether to work with you.
There’s an upside, however. Although a bankruptcy filing will remain on your credit report for up to ten years, the impact on your credit score will lessen with time.
Here’s what you can expect:
Of course, how you handle your credit after the bankruptcy will also play a role in your creditworthiness, and you can proactively take steps toward improvement.
After receiving your discharge, you shouldn’t have as many financial obligations, and you can use the extra money to keep your finances in the black. Here are a few ideas:
After your financial affairs are in order, consider whether you need a will, a living will, a health care power of attorney, or a general power of attorney. A little planning and discipline will go a long way toward protecting you and your family’s financial future.