What happens after you file for bankruptcy?
Behind the process
Filing business bankruptcy is a federal process overseen by the U.S. Trustee Program. In any type of bankruptcy, a committee is assigned by the trustee that will represent the company’s stockholders and credit lenders to ensure a fair outcome. Although it may not feel like it at the time, the ultimate goal of business bankruptcy is to help you find financial stability once again. In all bankruptcies an automatic stay is issued. This legally stops all collections, foreclosures, evictions, and lawsuits.
The process behind Chapter 7 in business bankruptcy is fairly straightforward: The requirements to file bankruptcy are that a trustee is responsible for redistributing the assets to the creditors and overseeing the liquidation process. They run meetings between all the parties and ensure fair distribution. You won’t have much control over the proceedings and, when it’s all said and done, you will be free to pursue your next project.
What to Expect in Bankruptcy Court
After Your Initial 341 Hearing
How does filing bankruptcy affect you?
The effects of bankruptcy will vary largely depending on what kind of bankruptcy you file, your financial situation after bankruptcy, and how responsibly you manage the process of rebuilding your credit.
It may be difficult to secure credit or larger loans for a time. Financial responsibility after bankruptcy can minimize the effects somewhat, and some credit card companies actually seek out individuals who have just filed for bankruptcy to get them as a customer.
What happens after a bankruptcy discharge?
- If you filed Chapter 7, and the trustee issued a report that there are no non-exempt assets once you receive your discharge the case is over. There will no longer be any contact with the trustee or the bankruptcy court. If however, the trustee found that there are non-exempt assets, then the trustee will continue to work with creditors and manage the liquidation of non-exempt assets. You will be required to cooperate with the trustee even after a discharge is granted, and the trustee can request that the court revoke a discharge up to a year after it has been granted if he or she becomes aware of fraud or non-disclosure of assets.
- If you file a Chapter 11 & 13 Bankruptcy, your case will be closed shortly after making your final payments. The discharge will be granted, the final disbursements will be made by the trustee to your debtors, and after the trustee’s final report the case will be closed.
Creditors are forbidden from contacting consumers after filing for bankruptcy due to the bankruptcy discharge order. If they do contact you during this time, we will sue them on your behalf. With that said if you have a debt that is not dischargeable then a creditor can contact you regarding that debt and you should set up a payment plan. We are legally equipped to help you with this in most cases. If a creditor is contacting you post-bankruptcy discharge when the debt should have been dischargeable it is likely they did not receive notice for one reason or another. You should contact the creditor and provide them with your case number and filing date. If they require additional information you can mail or fax them notice of the discharge and 99% of the time this will clear up any confusion. If a Creditor is still reporting negative items on your credit report or an account is reporting as having a balance when it should show zero after filing bankruptcy you will need to dispute these items with the creditor and the credit bureaus reporting the negative items. You should always send your disputes in writing through the mail in order to have any possible claims in the future. Under the Fair Credit Reporting Act, if mis information continues to be reported you may have a claim and be entitled to up to $1,000 in damages for each violation. Our attorneys are highly skilled at pursuing these actions. We have successfully helped many of our clients get the compensation they deserve.