Written By: Attorney Robert Stiberman | Updated 2/26/2026
Summary:
- Automatic Stay goes into immediate effect, halting most collection actions, lawsuits, and creditor harassment.
- Your property becomes part of the bankruptcy estate. This does not mean you will lose it, as exemptions and the Chapter filed come into play.
- You are required to attend a meeting of creditors with your assigned bankruptcy Trustee.
- You must complete a financial management course (only applicable to Chapter 13 and consumer Ch 7 cases).
- In a Chapter 13, your first of 36 or 60 monthly payments is due within 30 days of filing.
- A Chapter 7 discharge typically takes 5 to 6 months after filing. For Chapter 13, it takes 3 to 5 years, depending on your plan duration.
- Most people can begin rebuilding their credit after receipt of their discharge.
Bankruptcy is typically considered a last resort, allowing people who are struggling with debt to receive a fresh start. However, while bankruptcy does erase most types of debt, it can be a complicated process. If you’re uncertain of what happens when you file for bankruptcy and what you can expect, we’re breaking down the process from what happens to your property to your credit report and more.
What Does It Mean to File for Bankruptcy
Filing for bankruptcy is a formal legal process where an individual, married couple, or business entity, referred to as the “Debtor”, seeks the court’s assistance to restructure or eliminate unmanageable debt. The type of relief depends on the bankruptcy chapter filed. For example, in a Chapter 7 “no-asset” case, eligible debts are completely discharged without the Debtor having to pay anything back. Alternatively, under Chapter 11 or Chapter 13, the Debtor enters into a court-approved reorganization plan to pay back a portion, or all, of their debt over a set period of years.
The Full Disclosure Requirement
Transparency and honesty are paramount in bankruptcy. The Trustee, the bankruptcy judge, and your creditors must be able to evaluate your complete financial picture. Under penalty of perjury, a Debtor is required to list all of their debts, assets, and sources of income, as well as any property transferred or sold within the preceding two to four years. Additionally, you must disclose anyone who owes you money, any specific debts you repaid within the last 90 days (or within the last year for payments to family or insiders), any potential legal claims or lawsuits where you may be entitled to receive compensation, and any settlements from which you are expecting funds.
Depending on the chapter filed, this information helps the court determine what assets might be available to creditors (Chapter 7), the feasibility of a proposed repayment plan (Chapter 13 and 11), and ultimately, the Debtor’s eligibility for a financial fresh start.
Your Responsibilities After Filing
Filing your petition is only the beginning of the bankruptcy process. To successfully receive your discharge, you must fulfill several post-filing responsibilities. These include completing a post-petition Financial Management Course (required in Chapters 7 and 13), attending the mandatory 341 Meeting of Creditors, and fully cooperating with your Trustee’s requests for information. Additionally, you are expected to meet all court deadlines, attend required hearings, and resolve any creditor objections. Depending on the chapter you filed, you must also turn over any non-exempt assets to the Trustee (in a Chapter 7) or make timely, consistent plan payments (in a Chapter 11 or 13).
What Happens to Your Property When You File for Bankruptcy?
One of the biggest concerns for our clients is the fear of losing their home or vehicle. It’s completely normal to ask, “Will I lose my car or house?” Fortunately, filing for bankruptcy does not necessarily mean you have to forfeit everything you own.
Under bankruptcy law, your assets become part of the bankruptcy estate the moment you file. This doesn’t mean you will lose all your assets. In Chapter 7, the bankruptcy trustee assigned to your case will determine if you have any non-exempt assets that can be applied toward your debts. Depending on your residency in Florida, you need to verify whether you qualify for Florida or federal exemptions to protect your assets. The exemptions are not automatic, so you must claim them properly.
In a Chapter 13 bankruptcy, the trustee will not seek to liquidate or sell your assets. However, your unsecured creditors must be paid at least what they would have received if your case had been filed under Chapter 7, as outlined in your Chapter 13 plan. Here’s a simple illustration of this principle:
Let’s say you carefully evaluate all available exemptions and discover you have $10,000 of non-exempt equity in your vehicle.
Chapter 7 Scenario: The trustee can take your vehicle and sell it to apply the proceeds toward your debts, or they may give you the option to buy back the equity if you want to keep your vehicle. Some trustees may allow you to pay the $10,000 over time (usually no more than one year).
Chapter 13 Scenario: You get to keep your vehicle (as long as you continue making your car finance payments, if financed). Your unsecured creditors must receive at least $10,000 throughout the life of your 3- to 5-year Chapter 13 plan.
An illustrative infographic for Florida residents navigating bankruptcy, contrasting how personal and real property, such as vehicles and homes, is treated in Chapter 7 versus Chapter 13 filings.
What Happens to Your Credit Score When You File for Bankruptcy?
Filing for bankruptcy will negatively affect your credit, making it difficult to establish lines of credit, rent an apartment, or get a bank loan. A Chapter 13 bankruptcy will stay on your credit for 7 years while Chapter 7 stays on your credit report for 10 years. However, the more time that passes after your bankruptcy, you’ll have opportunities to improve your credit. If you do take out a credit card or small loan, it’s important to stay on top of any payments because late payments after bankruptcy can make it even harder to improve your credit report.
Bankruptcy Terms to Know
You may encounter certain terms during a bankruptcy proceeding that you may not understand. Here are some of the most common bankruptcy terms and their meaning:
- Automatic Stay – A temporary freeze on most legal proceedings and creditor communications that goes into effect when you file bankruptcy.
- Bankruptcy Trustee – A non-government employee appointed to administer your bankruptcy case.
- Discharge – Receiving a discharge in bankruptcy means that you are no longer personally responsible for eligible debts included in the bankruptcy.
- 341 Meeting of Creditors – A mandatory meeting where your bankruptcy trustee will examine you under oath which usually takes place within 45 days of filing for bankruptcy. Creditors also have an opportunity to ask you limited questions but they rarely appear the meeting.
- No asset case – a bankruptcy case where there aren’t any assets to liquidate for the benefit of creditors.
- Confirmation Hearing – A monthly bankruptcy hearing where the chapter 13 bankruptcy trustee decides whether to: recommend confirmation of the chapter 13 plan, recommend dismissal of the chapter 13 bankruptcy, or continue the hearing for the following month for further review.
- Debtor – the individual or business that files for bankruptcy is referred to as the debtor. When a married couple file bankruptcy together, the spouses are referred to as Debtor and Joint Debtor, or Debtors.
Schedule a Consultation With a Bankruptcy Lawyer Today
If you are concerned about debt and would like to know more about what happens after you file for bankruptcy, contact an experienced bankruptcy attorney in Florida at Stiberman Law. Schedule a free consultation by calling us at (954) 932-7804 or fill out the form below to get started.
