What Happens When You File for Bankruptcy?

The concept of bankruptcy is overwhelming. Many who are considering bankruptcy are so focused on the court appearance that they let their anxiety get the best of them and do not realize that the courtroom part of the process is a very small blip in the bankruptcy timeline. Going before a courtroom of people in defense of oneself is indeed intimidating. However, for those who have hired a good bankruptcy attorney, it's typically a smooth process that passes quickly.

The Initial Consultation

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The bankruptcy process happens in stages that begin, for most people, with an initial consultation with a bankruptcy attorney. During this first meeting, the attorney or a member of his staff will sit down with prospective clients and review their financial records with them and advise them about which bankruptcy is right for them. This consultation is often free of charge. If a consumer chooses to hire the attorney after the initial consultation, then the lawyer will typically ask for a retainer or portion of his fee up front.

Evaluating the Value of Assets

Once the fee is paid, the lawyer's office will provide clients with literature about bankruptcy and also give them a worksheet that asks them to evaluate the value of their assets. This can also be intimidating because many people automatically begin assuming that they are about to lose their possessions. In fact, federal and state law allows for exemptions up to a certain amount, so chances are that unless one has a lot of very valuable items, one is not likely to lose everything; oftentimes, one loses nothing.


After this form is turned in to the attorney, the attorney will file a petition for bankruptcy with the court on your behalf. Many attorneys also require that clients pay filing fees as well(if they are not included in the lawyer's initial fee) before they will file. Once the attorney has filed with courts, the hard part for most clients is over. At that point, creditors can no longer pursue collections, judgments, wage garnishments, etc. against someone who has filed.

Filers will receive a notification to appear in bankruptcy court anywhere from a few days to several weeks after their attorney files with the court. This period can vary greatly from state to state because many states have specific windows during which creditors may notify them of debt owed.

The Court Appearance

The court appearance itself seldom lasts more than a few minutes and often does not even take place in a courtroom but rather a conference or mediating room within the courthouse. Filers may be asked a few questions by the court. However, as long as their paperwork is in order and everything else is satisfactory, their bankruptcy will be approved and a discharge date provided. Unless the court requires some type of further action or there are questions about the paperwork you and your attorney have completed, the process is finished and the discharge period begins.

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