What Really Happens When You File for Bankruptcy?
Gary De Pury

Filing for bankruptcy is a major decision—and if you're considering it, you're probably already under a lot of financial stress. There's a lot of misinformation and fear out there about what bankruptcy actually means. So let’s clear the air. Here's what really happens when you file for bankruptcy—and what you can expect along the way.

 

Step 1: You Talk to a Bankruptcy Attorney

Before anything is filed, the first step is usually a consultation with a bankruptcy attorney. This is your chance to ask questions and get a clear picture of whether bankruptcy is the right choice for you. The attorney will evaluate your income, assets, debts, and financial goals to determine if you qualify for Chapter 7 or Chapter 13 bankruptcy—or if another solution might make more sense.

 

Step 2: You Gather Your Financial Information

To prepare your bankruptcy petition, your attorney will need detailed information about your finances. This includes:

  • Pay stubs or proof of income

  • Tax returns

  • A list of all debts (credit cards, medical bills, loans, etc.)

  • A list of all assets (bank accounts, property, vehicles, etc.)

  • Monthly living expenses

It might feel overwhelming, but your attorney will guide you through it step-by-step.

 

Step 3: You Complete Credit Counseling

Before filing, you're required to complete a credit counseling course from an approved provider. This usually takes about an hour and can be done online or over the phone. After completing the course, you’ll get a certificate that’s filed with your bankruptcy petition.

 

Step 4: Your Bankruptcy Case is Filed

Once everything is prepared, your attorney files your bankruptcy petition with the court. From that moment, an automatic stay goes into effect. This means:

  • Creditors must stop collection calls and letters

  • Lawsuits, garnishments, and foreclosures are paused

  • You get immediate relief from creditor pressure

Step 5: A Trustee is Appointed and a Meeting is Scheduled

The court assigns a bankruptcy trustee to oversee your case. You’ll also be scheduled for a 341 Meeting of Creditors, usually about 30–45 days after filing. Don’t worry—this isn’t a courtroom trial. It’s a brief meeting where the trustee asks you a few questions under oath about your bankruptcy petition. Creditors can attend, but in most cases, they don’t.

 

Step 6: You Follow the Rules and Complete Any Requirements

If you filed Chapter 7, you may be asked to turn over non-exempt assets (if any), and you'll complete a second financial education course. If you filed Chapter 13, you’ll start making payments under a court-approved repayment plan that usually lasts 3–5 years.

 

Step 7: Your Debts Are Discharged (Wiped Out)

In a Chapter 7 case, the discharge usually happens about 3–4 months after filing. In Chapter 13, it comes after you complete your repayment plan. Once your discharge is granted, you are no longer legally responsible for most of your debts—and you get a fresh financial start.

 

Final Thoughts

Filing for bankruptcy doesn’t mean failure. It’s a legal tool designed to help people move forward when they’ve become overwhelmed by debt. The process might feel intimidating, but you don’t have to go through it alone.

If you're struggling with debt and wondering if bankruptcy is right for you, we’re here to help. Contact our office today to schedule a free consultation and take the first step toward financial peace of mind.