Bankruptcy Facts & FAQs

After the bankruptcy petition is filed, the court mails a notice to all the creditors listed in the schedules. This usually takes a couple of weeks.

Yes. The court will immediately issue an order (called an “automatic stay”) which prevents bill collectors from taking any action to collect debts.

Bankruptcy will temporarily stop virtually all actions that a creditor can take against you. Once you file, your creditors must work through the bankruptcy court process. This means that debt collection lawsuits, utility shutoffs, foreclosures and repossessions will be stopped (sometimes only temporarily).

As soon as a creditor or bill collector becomes aware of a filing for bankruptcy protection, it must immediately stop all collection efforts. After you file the bankruptcy petition, the court mails a notice to all the creditors listed in your bankruptcy schedules. This usually takes a couple of weeks.

Creditors will also stop calling if you tell them that you filed the bankruptcy petition. Give them the “docket number” for your case. This is the number given to you by the court. It will be at the top of your petition.

In some cases, you or your attorney should contact the creditor immediately upon filing the bankruptcy petition, especially if a law suit is pending. If a creditor continues to try to collect, the court can take action against them.

Yes, it will stop immediately (although it may be temporary). Filing for bankruptcy means that the court gives you an “automatic stay”. An automatic stay means that the court stops your creditors from whatever actions they have been taking to collect from you. Creditors must immediately stop actions such as:

• repossessing your car,
• garnishing your wages,
• taking money from your bank account,
• cutting off your utilities, or
• taking back other property on which you owe money.

The stay will prevent your creditors from taking action until the court lifts (removes) the stay.
Some people use the time given under a Chapter 13 bankruptcy “stay” to try to sell a house in order to avoid foreclosure.

No. The Bankruptcy Code prohibits government units and private employers from discriminating against you because you filed a bankruptcy petition.

No. There are no debtor’s prisons in the United States.

You usually will not need to go to court. About 30 to 40 days after filing the bankruptcy petition, you will have to attend a hearing presided over by a bankruptcy trustee. This hearing is called the First Meeting of Creditors. The trustee is not a judge, but a person appointed by the United States Trustee to oversee bankruptcy cases.

At the First Meeting of Creditors, the trustee will ask you questions (under oath) about your bankruptcy papers, your assets, debts and other matters. Creditors will also be permitted to ask you questions. However, usually creditors do not attend these meetings if you have filed for Chapter 7 bankruptcy.



If you file for a Chapter 7 Bankruptcy, you normally do not need to return to court. If you filed for a Chapter 13 Bankruptcy, you may need to return to court for a confirmation hearing before the bankruptcy judge.

No. In some cases where only one spouse has debts. It may make sense for only one spouse to file, if one spouse has debts that are not dischargeable.

Both spouses are responsible for the debts acquired together while they are married. If you file for a bankruptcy on these joint debts, your creditors can pursue your spouse for payment. If you are living together, it may be wise for you to jointly file for bankruptcy.

If the debt belongs to you alone, the creditor cannot pursue your spouse for the debt after you file for bankruptcy. Before you make a decision on whether the debt is a joint debt or yours alone, you may want to ask an attorney.
If you co-signed for a debt with an unmarried partner or someone else, you cannot file jointly for bankruptcy. However, you can file separately.

You can protect a friend or relative who co-signed with you by filing for Chapter 13 bankruptcy. When you file under Chapter 13, creditors are not allowed to pursue your co-signers as long as you are keeping up the payments under the plan. As long as you pay the creditor as proposed by the plan, the creditors will not pursue the friend or relative who co-signed with you.

If you wait to file for a bankruptcy and use your credit to take a last minute vacation or make some major purchases, the court may decide that these later debts are not dischargeable.