A discharged is obtained 1-3 years after you have filed for bankruptcy. So you must be wondering what happens after one has filed for bankruptcy. Whatever happens after you have filed for bankruptcy would be the result of your having filed for bankruptcy and the chapter that you have filed under.
No Collection Calls
If you have filed for personal bankruptcy under Chapter 7 or 13, an automatic stay is issued to your creditors. This means that neither can they make any collection efforts, nor can they sue you. So immediately after you have filed for bankruptcy, you see a stop to all the collection calls that you must have been getting prior to filing for bankruptcy.
Your bank, mortgage lender and utility companies will also be notified. Some utility companies may require you to pay in advance after you have filed for bankruptcy.
Within one month of filing for bankruptcy, a United States bankruptcy court trustee will hold a meeting with your creditors. You would have to be present at this meeting. At the meeting, the trustee will go over all the papers that you have submitted. Furthermore, your creditors might contest your exemptions.
Liquidation Of Your Assets
If you have filed for Chapter 7, your non-exempt assets will be liquidated to pay off your creditors. So you should be prepared to lose some of your personal belongings. This can be an emotionally tough time. Furthermore, if you have recently bought a car with the financing option, you will have to return it.
Repayment Plan
If you have filed for Chapter 13, a repayment plan will be worked out. You will be allowed to reschedule your payments. Based on this repayment plan, you would be required to make monthly payments to your trustee who will then distribute this amount amongst your creditors. It usually takes 3 to 5 years to get discharge under Chapter 13 bankruptcy.
Chapter 13 bankruptcy will also put an immediate stop on foreclosure proceedings. You will be given an opportunity to catch up on your mortgage payments.
Business Bankruptcy
If you are filing for business bankruptcy under Chapter 11, you are require to disclose all your assets and make a list of all the debts that you are seeking protection from. After you have filed for Chapter 11, you will no longer be in control. The US Trustee is the person who will be making all the important decisions in your case. Till you have obtained a discharge, you will not be able to buy another company or sell off a part of your company. Any expansion plan that you have in mind will have to be put on hold. The next few years after you have filed for bankruptcy will be aimed at paying off your creditors, as much as possible.
Unavailability Of Loans
In personal bankruptcy cases, life after filing for bankruptcy is not easy. For one, you will have to deal with many financial restrictions. After you have filed for bankruptcy, your credit scores will be badly hit. Furthermore, bankruptcy will remain on your credit report for ten years. So, immediately after bankruptcy, you will have a hard time getting any loans or mortgage on your house.
After Discharge
After you have obtained a discharge from the bankruptcy court, you will have to start working on improving your credit ratings. The first step that you can take is getting a secured credit card. This is like a usual credit card but you will have to put a deposit on it. Each month make sure that you pay the due amount. Next, you should get a car loan or a small loan and repay it on time. These steps will help you rebuild your credit.
Once your credit has been repaired to a large extent, you can seek a home loan. However, always remember to pay your bills on time and ensure that you are spending within your budgetary limits. After all, you would not want to be dealing with another bankruptcy.