Overcoming Personal and Legal Challenges

Overcoming Personal and Legal Challenges

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What happens when you file for bankruptcy?

Once you make the decision to file bankruptcy, you will need to prepare your petition. The petition contains a vast amount of information about you and a complete financial profile. You will include all the details of your debts and income within your petition.

The United States Courts explain what happens after you submit your petition following the Bankruptcy Code, a federal law. There are some state bankruptcy laws that will impact your case, such as exemptions you may take.

After filing

Once you file your petition, the bankruptcy court will issue an automatic stay. This stops all collection action against you. Nobody you owe money to is able to continue to demand your payment or try to collect your payment while the automatic stay is in place. They can get into trouble for trying to do so. In addition, they cannot take steps to recoup a debt, such as taking you to court or repossessing collateral.


Your case will go to the bankruptcy court in your district. You may never actually go to this court, especially if you do not live close to it. Instead, the trustee, which is the person who is in charge of your case and assets during the process, will come to a place closer to you. You will meet with the trustee, and your creditors will have a chance to object to your filing. You may have to answer questions about your financial situation and provide further documentation to the trustee.


Most cases will end in a discharge, which is the court accepting your request for bankruptcy relief. In Chapter 7, this means the court discharges all your debts. You will no longer owe them or java an obligation to the creditor. In Chapter 13, you will develop a repayment plan, and discharge will not happen until you complete the plan. The court may also dismiss your case, which means refusal of the bankruptcy request.