What Happens After Completing Bankruptcy

No matter what your financial situation, filing bankruptcy will have a significant impact on your long term financial situation. Don’t be fooled – bankruptcy is not simply a magic eraser that gets rid of your debts and then makes everything better. However, you do have a life after bankruptcy. After your bankruptcy has been processed, there are circumstances that will need to be dealt with. Whether you are currently in the bankruptcy process or are considering filing bankruptcy, understanding just what will happen after the bankruptcy process is very important.

What are the Steps Immediately After Bankruptcy?

After you and your lawyer complete the court process, the first step that needs to take place is the personal financial management course. Your personal financial management course involves a short class where you will learn information that will help you manage your finances better. This is a step required by law, and it will also help you prevent another potential bankruptcy in the future.

After you have completed your course and other requirements, you will soon receive a discharge making your bankruptcy official. This means you are protected from the debts that were covered by the bankruptcy and the collectors for those debts should stop contacting you. If you have a problem with collectors regarding debts under the bankruptcy, contact your lawyer for help.

Depending on your bankruptcy, you may or may not have been allowed to keep all of your property. If you have not, you can expect a visit from a trustee. The trustee is an individual assigned by the court to assume ownership of your property, liquidate it, and distribute the proceeds to creditors.

People who have completed the bankruptcy process receive a “fresh start” in a financial sense – but there are also severe financial consequences that must be dealt with. Bankruptcy has the effect of severely lowering credit ratings, which will limit your ability to obtain new financial agreements, especially loans and mortgages. Creditors know that you have a risky credit history and that in the past you have discharged other debts through bankruptcy. It is important to keep this is mind as you make financial decisions as you will need to rebuild your credit and continually act in a financially responsible manner in order to take control of your finances.

What Do I Need to Do Over the Long Term?

The bottom line is you should not allow your bankruptcy to go to waste. Consequently, it is important that you know the important actions and considerations to make after your bankruptcy. Listed below are some simple tips that should help you make decisions to secure your financial future after bankruptcy:

• Budget and make sound financial decisions.
• Rebuild your credit.
• Amass your savings.
• Check your credit reports.

Over time, with prudent planning and discipline, you can put yourself on a sound financial footing and overcome the circumstances which led to you file bankruptcy in the first place.