Filing for Chapter 7 bankruptcy can feel like a huge financial relief. However, the process doesn’t end when you submit your petition.
The post-bankruptcy filing stage is equally complex and requires careful consideration. Specific steps can dismantle the process, resulting in a loss of discharge or land in court.
Once the case is in motion, there are particular rules that you follow. As your trusted Chapter 7 bankruptcy law firm in Winter Haven, we have prepared this guide for a transparent and swift bankruptcy filing.
Here’s what you need to avoid.
Seven Facts to Avoid After Chapter 7 Bankruptcy Filing
Chapter 7 bankruptcy means getting acquainted with new financial recovery guidelines. To prevent your unintentional discharge or other legal complications, you need to avoid these seven facts:
Cannot Pick or Choose Whom to Pay
Once you file for bankruptcy, you cannot pick and choose whom you can pay. The bankruptcy court will handle how the debts will be settled. Avoid paying your preferred creditors any money on your own; the trustee ensures that all creditors are treated equally.
Cannot Get New Debt
You cannot acquire new debt after filing for Chapter 7 bankruptcy. Any debt acquired after filing Chapter 7 is not considered under bankruptcy. In such cases, you are fully responsible for repaying any new obligations. Incurring additional debt may undermine your good faith and expose you to claims of intentional conduct or bankruptcy fraud.
Cannot Make Large Purchases on Credit
Many individuals aren’t aware of the purchase amounts they need to make after filing for bankruptcy. If you make large purchases on credit, it can make a negative impression that you can falsely file for bankruptcy to escape your debts.
It is also tough to get new credit if the case is ongoing. Lenders will know you are in bankruptcy and may reject your loan requests.
Cannot ignore Trustee or Court Requests
Attending the 341 Meeting is mandatory after filing for bankruptcy. This meeting is also called the Meeting of Creditors, where you would need to answer a few questions under oath. Our experienced Chapter 7 bankruptcy attorney in Winter Haven will be present and prepare you with details of the meeting.
You cannot ignore any questions the trustee asks, as it may appear that you are being non-transparent about your financial situation. In some instances, if you refuse to show certain documents, your case can be dismissed.
Cannot Lie or Leave Things Out
Do not forget to list something, as each asset, expense, financial problem and debt amount listed will decide your resolution process. If any information is identified later, it may be considered bankruptcy fraud, and your entire case may be dismissed.
Cannot Keep Secured Property Without Reaffirming or Surrendering
Chapter 7 clears unsecured debt like credit cards and medical bills; secured debts work differently. If you have any particular kind of property, you need to stay current on payments or affirm the debt. If you don’t, the lender has the right to repossess the property through foreclosure, even if you were paying.
Cannot File Chapter 7 Again Right Away
You cannot file for Chapter 7 right after one set of your debts gets settled. You have to wait for 8 years from the date you filed before you can file for another Chapter 7. Once you get discharged, you must start managing your finances carefully, as you are locked in for a while.
What can happen immediately after filing for Chapter 7 Bankruptcy?
The post-filing stage for Chapter 7 bankruptcy is equally essential. As your trusted Chapter 7 bankruptcy law firm in Winter Haven, we can help you with the following aspects that can happen immediately after filing:
Automatic Stay Occurs
An automatic stay goes into effect as soon as you file for Chapter 7 bankruptcy. All creditors must stop all collection efforts, calls, messages, and orders. However, certain debts, including child support and taxes, are not exempt.
Completing Debtor Education Course
Before you discharge, you need to complete the Debtor Education Course from an approved provider. It teaches all debtors appropriate financial management skills and must be completed within 45 days after the 341 meeting. The failure to complete the course can result in dismissal of your bankruptcy case.
Potential Asset Liquidation
The trustee will review your case to determine whether you have any non-exempt assets. Your non-exempt assets can be sold to pay off the creditors. If you have any non-exempt assets, the trustee will sell them off to pay your debts.
Other Objections and Challenges
Creditors and trustees have a limited time, usually 60 days from the 341 meeting, to object or challenge specific debts. Our experienced Chapter 7 bankruptcy attorney in Winter Haven will help you make the right decisions to avoid objections or challenges. If no objections are raised, the case can proceed smoothly.
We Can Help You Avoid Mistakes
Debt Assistance Law Firm (DALF) is right here to help you avoid mistakes after filing for Chapter 7 bankruptcy. You must remain transparent about your distress and recover your financial strength in accordance with the legally approved procedure.
Connect with us for end-to-end Chapter 7 bankruptcy support and free consultation.