Many people worry about what happens after they make the decision to file for bankruptcy. While preparing your paperwork is half the battle, it’s important to be prepared for what occurs after you’ve signed your petition. Here’s what you can expect after filing bankruptcy.
The Automatic Stay is Put in Place.
An automatic stay is a federal court order that goes into effect the moment a bankruptcy case is filed. It prevents creditors from making any effort to collect on debts you owe. You’ll be assigned a case number by the court, which you should give to any creditors that try contacting you. If they persist, they will have to answer to the bankruptcy court.
A Trustee is Assigned.
After filing bankruptcy, your case will be assigned to a trustee. A trustee is a court appointed attorney who manages the property of the debtor for the principal benefit of the unsecured creditors. He or she is under the general supervision of the court and direct supervision of the U.S. trustee. The trustee’s responsibilities include reviewing your petition to make sure it’s complete and bringing actions against creditors or the debtor to recover property of the bankruptcy estate.
The 341 Meeting is Scheduled.
The 341 meeting, or meeting of creditors, will be conducted by the trustee. Soon after filing bankruptcy, you’ll be notified about the time and place of this meeting. At this meeting, you’ll be questioned about your bankruptcy paperwork under oath. Creditors are allowed to attend this meeting, but often times they do not.
Your Property is Assessed.
Following the 341 meeting, the trustee will assess the property in your estate. He or she will determine if there’s anything that shall be sold to repay the creditors. If so, property may be sold or auctioned off by the trustee. If not, the trustee will report that there are no assets in the case.
Your Case Should Be Discharged.
Barring any objection to your case, you should receive your discharge within a few months of filing bankruptcy. The discharge is the court order that legally wipes out certain debts which are described in the Bankruptcy Code. It releases you from personal liability for any dischargeable debts. The discharge notice will be mailed to you and all of your creditors.
What Happens to Your Credit Report After Filing Bankruptcy?
After your discharge, your bankruptcy will be reflected in your credit report. Your debts will be noted as included in a bankruptcy, and there will be a zero balance. No new activity should be seen on these accounts such as delinquencies, new collection reports or repossessions.
Getting Loans and Higher Interest Rates.
While bankruptcy gives you a financial fresh start, you will likely notice higher interest rates. You also might not qualify for conventional mortgages and car loans right away. But if you continue to pay your bills on time, you will likely qualify for these types of loans again within a few years.
Filing Bankruptcy in Jacksonville
Knowing what to expect after you file is an important part of your decision. If you’re considering filing for bankruptcy, consult the attorneys at Parker & DuFresne. Call us at 904-733-7766 to speak with one of our bankruptcy experts today.