What to Do After You Have Filed for Bankruptcy
Managing life before debt discharge
When your Chicago bankruptcy filing goes into effect and creditors are being paid, you need some guidelines to follow:
- Complete the pre-discharge debtor education course offered by a provider approved by your trustee. You will receive information about budgets, managing money, and wise use of credit. Keep your certificate received as proof of doing the course. You will need to submit it to the trustee in order to receive your debt discharge.
- Do not sell or transfer any assets without contacting your lawyer. Selling or transferring assets during bankruptcy is considered a fraudulent transfer.
- Contact your attorney when you receive notice for the Creditor’s Meeting for a chapter 7 bankruptcy.
- Bring the following documents to the Creditor’s Meeting:
- State ID card or driver's license
- Last tax returns filed
- Vehicle titles
- House deed
- Any other property titles
- Mortgage statement showing last balance
- Property tax bill
- Divorce papers (if recent divorce)
- Current pay stub
- Pension/401K plan statements
- Stock/bond certificates
- Do not pay back loans of $600 or more to business associates or relatives. The trustee can recover the money paid and divide it equally among creditors. In fact, if you repaid loans that were $600 or greater within the year prior to filing bankruptcy, the trustee may demand a return of those funds.
Life after bankruptcy
You are free from debt, which is a new relief. However, because of your bankruptcy, new limitations exist:
- You may have to wait two to three years before qualifying for a traditional mortgage or car loan.
- Bankruptcy will lower your credit scores. Interest rates are likely to be higher until you build your credit again.
Future solvency
Obviously you need to create a solvent future. You can begin by:
- Breaking bad financial habits
- Applying what you learned about wise spending
- Following a budget
- Setting aside savings
- Avoiding high interest credit cards
Jay Fortier is a Chicago bankruptcy lawyer who previously worked as a financial advisor for a large, national financial advisory firm. He also serves as an associate real estate broker with Sky High Real Estate, INC and is a licensed REALTORâ¢. His financial experience helps him guide clients to go beyond bankruptcy and understand how they became insolvent, helping them to plan for future solvency.
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