What to Expect After Chapter 7

Chapter 7 bankruptcy affects many facets of an individual's financial future. Some special planning or considerations may be necessary in order to fulfill court obligations or to obtain employment, credit and housing.

Discharges

Once the bankruptcy process is completed, the debtor will receive a Notice of Discharge listing all discharged debts. The debtor must resume payment on any debts not discharged.

Debt Counseling

One of the provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act is that all debtors must undergo a post-filing debt counseling session. Sessions typically last two hours and may be completed online, over the phone or in person.

Interest Rates

Once a person has filed bankruptcy, interest rates on new credit cards or loans are usually significantly higher than before filing.

Security Deposits

Though a bankruptcy will not usually disqualify people from housing rentals, individuals with a bankruptcy may need to pay extra for security deposits.

Employment

Some states allow employers to check credit reports for employee screening. Other states may not allow a bankruptcy to negatively affect employment decisions.

References

• U.S. Courts: Chapter 7: Liquidation Under the Bankruptcy Code
• Debt Education Alliance: The Consequences of Bankruptcy