It’s important to remember during your post-bankruptcy life, that bankruptcy is meant to help you. That’s why it’s there. And while it’s not quite the same as a completely blank slate, it is an opportunity to start over again.
Immediate Consequences You’ll See
The most significant result that you’ll see (and perhaps the reason you decided to file in the first place) is that all calls and contact from creditors stop immediately. This is a legal protection you now have, and any creditors that continue collection calls are in violation. There may be a few payments that are still applicable to you (for example, child support and alimony payments aren’t neutralized by bankruptcy). If you file bankruptcy under Chapter 11, you’ll be setting up a new payment plan to pay off your debts within a certain amount of time, and all collections must be set up according to that new structure.
By law, all independent filers for bankruptcy have to undergo credit counseling (before you file) and debtor education programs (after you file) that are approved by the U.S. Trustee Program. The pre-filing counseling will include a discussion of your current financial situation, an exploration of your options, and a personal budget plan. Debtor education that you undergo after filing will include lessons about managing your money, building a budget, and understanding credit.
Here are some other results that you can expect right away:
- Yes, it will be on your credit for up to 10 years (depending on the case)
- You’ll lose your credit cards
- Any wages you make afterwards are yours to keep and use
- Yes, you will have to explain yourself in some situations
- You’ll need to meet with a credit counselor
Some Tips for Post-Bankruptcy Life
It will take time and patience to rebuild your credit, but you’ll get there. For the first few years, any loans or credit cards that you are offered will be at terrible rates, and the best plan is to stay away from them altogether. Within a few years, you’ll get more feasible offers, especially if you’ve been able to show progress.
- Take the lessons you learn in Debtor education to heart
- Build your savings
- Consider a safe credit card
- Be ready to talk about your situation
You will have to talk about your journey with bankruptcy during some key conversations in the future. This might be talking with family to ask for help (finding a job, getting control of financing, finding housing). It might be your conversation with a potential landlord. It could be with your bank, or even a loan officer at some point in the future. It might even be with your employer, although you should know that an employer discriminating against you because of insolvency is against the law. In order to prepare for these conversations, you need to have a good grip on these three things:
- What led to the problem in the first place
- Your specific plan of action to solve the problem
- Specific goals that you have set and achieved along the way
Our team of specialists can help you navigate post-bankruptcy life, so that you understand your rights and exactly what to expect. Let us know what we can do to help you.