What happens after you declared bankruptcy

Many of your wander what is happening after you fill for bankruptcy. What is the process, what your creditors will do and what measures will be taken by bankruptcy court.

First of all filling for bankruptcy puts into effect an “Order for Relief”. That mean that all creditors MUST stop from trying to collect what you owe them. So at least for several weeks creditors cannot legally took your wages, cars, proprieties or empty your bank account. They are not allowed to touch you or disturb you in any way.

Stopping the creditors is the first effect of bankruptcy. The second one is that you are technically placing your assets and debts you owe in the hand of bankruptcy courts. You are not allowed to sell or give away any property. Nevertheless, with a few exceptions, you can do what you wish with possessions you acquire and money you.

The bankruptcy court will appoint a person called a “bankruptcy trustee”. This person is the court representative and he is the one that control your assets in the name of bankruptcy court. His main job is to see that your creditors are paid as much as possible on what you owe them. Also the more resources the trustee recovers for creditors, the more is paid.

The will study your documents to make sure they are complete and to search for nonexempt goods. He will also look at your financial transactions from the last year to see if any can be undone in order to free up.