When I sit down to discuss a person’s financial situation at a free, initial bankruptcy consultation, they are usually nervous about the prospect of dealing with bankruptcy judges, trustees, and their creditors. Many people are nervous just sitting down with a bankruptcy lawyer. Most of the time, for those who decide to file bankruptcy, their discharge order will arrive in due time without major problems or unexpected surprises. Clients are happy and relieved about their bankruptcy case being over, but they still have a few more steps to take to insure they get the most relief possible from their bankruptcy filing.
After a bankruptcy discharge has arrived, I recommend my clients take the following actions:
Pull credit reports. I recommend pulling a copy of your credit report from annualcreditreport.com about 3 months after you receive the order of discharge from the bankruptcy court. Although past defects will remain, the old discharged debts should all be listed properly and disclose that you no longer owe anything. Credit report errors can, and should be disputed (how to dispute from the Federal Trade Commission).
Figure out what debts you’ll still be paying. The most common debts excepted from discharge are student loans, domestic support obligations, and tax debts. However, it is very common for Chapter 7 filers to keep their house and car by continuing on with those secured-debt payments. I strongly recommend constructing a new “after-bankruptcy” budget to see where your money will be going each month, post-discharge.
Set up automatic savings. Part of the bankruptcy process is evaluating your budget and planning for a brighter future. One of the best things to do after being discharged is to set up an automatic deposit into an emergency savings account with some of the funds you will no longer be sending to old creditors. Of course, more money will be available for your regular bills too. By setting up an automatic system, you will be prepared for life’s emergencies which inevitably end up costing money.
Save your bankruptcy documents. In a no-asset Chapter 7 case, many debts owed prior to the date of filing are discharged regardless of whether they were listed on the bankruptcy petition or not. If old creditors, or debt collectors, contact you about a discharged debt, it is nice to be able to simply forward the discharge order from the bankruptcy court to get the issue resolved quickly without having to go look for it in the electronic filing system or calling you lawyer.
If you are ready to make the most out of a financial fresh start, I’d be pleased to speak with you in a free, initial bankruptcy consultation.