You have filed for bankruptcy, and your confirmation hearing is complete. Now you may ask yourself, “What can you not do after filing bankruptcies?” At Sadek Bankruptcy Law Offices, we help clients throughout Pennsylvania and New Jersey understand the limitations and obligations that come after bankruptcy. We also help guide them toward steps that protect their fresh financial start. Our attorneys have helped thousands of clients successfully complete their bankruptcy cases, and we are ready to help you do the same.
If you are considering filing or need advice after filing bankruptcy, call us in Pennsylvania at (215) 545-0008 or in New Jersey at (856) 890-9003 or contact us online to schedule your consultation today.
Understanding the Bankruptcy Process
The bankruptcy process is a legal procedure under the bankruptcy code that relieves individuals and businesses from overwhelming debt. Once your bankruptcy petition is filed, the bankruptcy court stops collection efforts and reviews your case.
Depending on the type of bankruptcy, the process may involve liquidating certain assets, creating a repayment plan, or discharging eligible debts. Every bankruptcy case is unique, but it requires strict compliance with legal rules.
A bankruptcy judge oversees the proceedings, while a bankruptcy trustee manages specific aspects of your case. These include reviewing your paperwork, verifying your financial situation, and determining which debts are dischargeable. Unsecured debts, like credit card debts and medical debts, may be dischargeable, while secured debts, recent tax debts, and unpaid child support may not be dischargeable.
What Happens After You File Bankruptcy?
Once your bankruptcy filing is submitted, the automatic stay goes into effect. This protection stops creditor harassment, wage garnishments, foreclosure actions, and most lawsuits. The bankruptcy court then schedules hearings and assigns a bankruptcy trustee to your case. You will complete credit counseling before filing and personal financial management courses afterward to qualify for a bankruptcy discharge.
If you file Chapter 7 bankruptcy, a liquidation bankruptcy, the trustee will review your assets, apply any bankruptcy exemptions, and use proceeds from any liquidated property to pay creditors. In Chapter 13 bankruptcy, you will follow a court-approved repayment plan, making monthly payments to the trustee for three to five years.
Understanding these steps is key to preparing for life after bankruptcy. During this time, you must follow all court orders and avoid financial missteps that could jeopardize your bankruptcy case.
What Can You Not Do After Filing for Bankruptcy?
After a bankruptcy filing, specific actions can cause serious problems for your case. The bankruptcy code is clear: failing to follow the rules can result in dismissal, loss of your discharge, or even allegations of fraud. Below are some of the things you can’t do after filing for bankruptcy.
You Can’t File for Bankruptcy Again (For The Time Being)
Once you file, federal bankruptcy law sets mandatory waiting periods before you can file again. For Chapter 7, you typically must wait eight years from the filing date of a previous Chapter 7 bankruptcy to file another. If you filed Chapter 13, the wait period may be shorter, depending on whether you received a discharge and which type you plan to file next.
These time limits prevent repeated filings and encourage exploring other debt relief solutions such as debt settlement, debt consolidation, or a debt management plan when another bankruptcy is not immediately available.
You Can’t Rack Up Additional Debt
Taking on new personal loans, credit card debt, or other unsecured debt after filing bankruptcy raises concerns for the bankruptcy court. In some cases, running up new balances right before or after filing can lead to claims that the debt is fraudulent and therefore nondischargeable.
The goal during this period is to stabilize your financial situation, not create new obligations you cannot afford. You should approach new, “risky” financial changes with caution. Only open new credit card accounts, take out new loans, or engage in other forms of borrowing when you know that these actions will support your long-term financial planning.
A PA bankruptcy attorney can help determine whether or not something will interfere with your bankruptcy case.
You Can’t Pick Which Creditors Get Paid
Once your bankruptcy proceedings begin, you cannot choose to pay certain debts while ignoring others. The bankruptcy trustee follows the bankruptcy code to distribute funds according to the legal order of priority.
For example, a secured creditor may be paid from the sale of collateral. In contrast, unsecured creditors, such as those holding personal loans or credit card balances, may receive payment from liquidated assets or through your repayment plan.
Attempting to favor one creditor over another, such as paying back a personal loan to a family member, can be considered a preferential payment and may be reversed by the trustee.
You Can’t Ignore, or Lie to, Your Bankruptcy Trustee
The bankruptcy trustee plays a central role in your bankruptcy case. They review your financial records, oversee the administration of your estate, and ensure the bankruptcy process follows U.S. Bankruptcy Code. Providing false information, hiding assets, or failing to comply with trustee requests can result in dismissal of your case or loss of your bankruptcy discharge.
If a debtor fails to attend hearings, submit required documents, or update the trustee about significant changes to their financial situation, the trustee can recommend ending the bankruptcy protection granted by the court. Full cooperation and honest communication are essential to completing your case successfully.
You Can’t Ignore Non-Exempt Debts
Bankruptcy can discharge certain obligations, such as medical bills, personal loans, certain forms of personal liability, and other dischargeable unsecured debts. However, not all debts are eliminated. Some nondischargeable debts include child support, federal student loans, recent tax debts, and settlement payments from personal injury caused by drunk driving accidents.
These debts remain your responsibility after a bankruptcy discharge, and you will still need to pay them. Understanding which obligations survive your bankruptcy filing allows you to prepare for future payments and incorporate them into your financial planning once the case closes.
You Can’t Rebuild Your Credit Immediately
Bankruptcy offers debt relief, but it also impacts your credit report and credit score for a few months to a few years. A Chapter 7 bankruptcy remains on your credit report for up to 10 years, and a Chapter 13 stays for 7 years. During this time, lenders will review your history carefully, and qualifying for new credit may be challenging.
However, your credit score will not stay low for the entire time that your bankruptcy filing is on your credit report. In fact, many of our clients see a 50-100 point increase within their first year of filing bankruptcy. This is because bankruptcy helps improve your debt-to-income ratio. After bankruptcy, you can use tools like a secured credit card and make sure to make payments in a timely manner in order to improve your credit score even further.
What Should You Do After Filing Bankruptcy?
Knowing the proper steps to take after filing bankruptcy helps protect your bankruptcy discharge and sets you up for long-term financial stability. You can make the most of your fresh start by following court requirements, adopting sound financial management practices, and building positive credit habits.
Comply With The Terms of Your Bankruptcy
If you filed Chapter 13 bankruptcy, follow your repayment plan exactly as approved by the bankruptcy court. Missing monthly payments or ignoring trustee instructions can lead to dismissal of your case. In Chapter 7 bankruptcy, comply with all requests from your bankruptcy trustee, attend scheduled hearings, and provide any financial documents required.
Your cooperation helps keep the bankruptcy process moving smoothly and ensures you remain on track to receive your bankruptcy discharge.
Budget and Save
After filing for bankruptcy, creating and following a realistic budget is one of the most effective ways to protect your fresh start. Track all income sources, list every expense, and set aside a monthly savings portion. This habit builds a financial cushion that can help avoid taking on new debt when unexpected costs arise.
If you are in Chapter 13 bankruptcy, budgeting plays an even greater role. Understanding what you need to know about obtaining assets after filing Chapter 13 bankruptcy can help you plan future purchases without disrupting your repayment plan or violating court requirements. Careful financial planning during this time is key to a successful outcome.
Re-Establish Credit
Rebuilding credit after a bankruptcy case takes time, patience, and consistent financial management. Start small by applying for a secured credit card or becoming an authorized user on a trusted account. Make every payment on time and keep credit card balances low to show lenders you can handle credit responsibly.
Monitoring your credit report helps verify that discharged debts are reported accurately and allows you to track your progress as your credit score improves. Over time, these steps will help restore your financial standing.
Save Your Bankruptcy Paperwork
Keep copies of all documents related to your bankruptcy case, including your bankruptcy petition, discharge order, and any reaffirmation agreements. These records can protect you if a creditor attempts to collect funds on a discharged debt in the future. Your paperwork is proof of your legal discharge under federal bankruptcy law.
How Can A New Jersey or Pennsylvania Bankruptcy Lawyer Help Your Bankruptcy Case?
At Sadek Bankruptcy Law Offices, we help Pennsylvania and New Jersey clients understand their rights and responsibilities under the bankruptcy code. From preparing your bankruptcy petition to representing you in bankruptcy court, our attorneys guide you through the bankruptcy process. We’ll address issues such as bankruptcy exemptions, repayment plan options, and the required filing fee. Our attorneys will tailor strategies to your financial situation and work toward the best possible outcome in your bankruptcy proceedings.
Post-Bankruptcy FAQs
Can You Buy a House After Bankruptcy?
If you have been asking yourself, “Can I purchase a home after filing bankruptcy?”, the answer is yes. Mortgage lenders usually require a waiting period after discharge, but approval is possible sooner if you meet credit, income, and down payment requirements. The key is to focus on rebuilding credit and demonstrating financial stability.
Can I Get a Car After Bankruptcy?
Yes, you can. It’s possible with a steady income and a budget that supports the payment. Some lenders work with individuals after bankruptcy, though interest rates may be higher initially, so choosing a loan that fits your financial plan is important. A Pennsylvania bankruptcy lawyer can help you understand the risks of getting a car loan after bankruptcy in PA.
Can I Rent or Lease After Bankruptcy?
“Can I Lease or Rent After Bankruptcy?” Yes, it’s possible, but landlords may review your credit report and bankruptcy history. Strengthening your application with proof of income, positive rental history, and solid references can improve your chances of approval.
How Do You Rebuild Your Credit After Bankruptcy?
Use a secured credit card, pay all bills on time, and reduce credit utilization. Regularly monitor your credit report to verify that discharged debts are reported accurately.
What Can You Not Do After Filing Chapter 7 Bankruptcy?
In Chapter 7 bankruptcy, avoid transferring property, taking on new unsecured debt, or making large purchases without discussing them with your bankruptcy trustee. The trustee may liquidate non-exempt assets to pay creditors, so hiding or giving away property can cause legal problems.
What Can You Not Do After Filing Chapter 13 Bankruptcy?
In Chapter 13 bankruptcy, your repayment plan is a binding court order. Without trustee approval, do not miss monthly payments or take on significant new debt. Avoid selling or transferring property without first consulting your attorney, as it could disrupt your repayment plan and jeopardize your bankruptcy protection.
Need Help Navigating Life After Bankruptcy? Call the PA & NJ Bankruptcy Lawyers at Sadek Bankruptcy Law Offices Today
The safest way to achieve a fresh start after bankruptcy is to work with an experienced attorney who understands every step of the bankruptcy process. At Sadek Bankruptcy Law Offices, we provide clear guidance so you can complete your case, avoid costly mistakes, and confidently move forward.
Call (215) 545-0008 in Pennsylvania or (856) 890-9003 in New Jersey, or contact us online to schedule your consultation today. Our team is ready to help you build a stronger financial future.