In order to make the bankruptcy filing process more manageable, it helps to understand what will happen next. Keep reading to discover what happens after filing for Chapter 7 bankruptcy. How to keep your automobile, and why creditors can’t contact you anymore after you’ve filed.
The immediate consequences of declaring bankruptcy
When you file for Chapter 7 bankruptcy, you’ll be awarded a case number and a bankruptcy trustee. If you’re filing for bankruptcy, the trustee will be in charge of supervising the process, reviewing your bankruptcy paperwork, and possibly requesting more proof of information. The creditor meeting will also be overseen by the trustee.
Chapter 7 and Chapter 13 bankruptcy provide immediate protection from creditors. The term “automatic stay” describes this situation. Creditors cannot take any further action to collect debts after a bankruptcy filing because of the automatic stay.
Following a bankruptcy filing, creditors are legally barred from contacting you or taking any further action to collect a debt, whether it be for medical bills, credit card bills, personal loans, unsecured debts, or anything else. If you file for bankruptcy protection, your employer must immediately stop any wage garnishments.
The impact of bankruptcy on credit
Filings for both Chapter 7 and Chapter 13 bankruptcy are recorded on a person’s credit history. Which sort of bankruptcy you file will determine how long it takes to appear. Your credit report will reflect a Chapter 7 bankruptcy for 10 years after the filing date. If your Chapter 13 bankruptcy case was not resolved to discharge, it will remain on your credit record for 10 years from the day you filed for bankruptcy.
The last steps toward long-term debt relief
The most time-consuming part of a Chapter 7 bankruptcy is preparing and filing the bankruptcy paperwork with the court. This, however, does not indicate that your work is finished. There are specific requirements that must be met by all Chapter 7 bankruptcy filers before their cases can be closed and they can be granted a discharge.
Debt Collection Procedures Are Put On Hold Automatically
A bankruptcy filing will initiate the automatic stay. For as long as your case is continuing, your creditors will be prohibited by the automatic stay from taking any further collection actions against you. This means that they are prohibited from attempting to contact you in an effort to collect any unsecured debts, such as credit card balances. Your salary will also be protected from garnishment by the automatic stay.