Bankruptcy Aftermath

What Happens to Co-Debtors Who Don’t File?

Co-debtors can be protected on consumer debts that are in a Chapter 13. Typically, a co-debtor will remain legally liable on joint debts after a Chapter 7.

What Happens After I File?

In approximately a week and a half, the court will send you a notice of the Meeting of Creditors. The Meeting of Creditors is held approximately 30 days after you file. A Chapter 7 case typically lasts 90-120 days until discharge. A Chapter 13 debtor begins to make Chapter 13 payments 30 days after the filing and continues to make payments for the duration of the plan.

Does Filing Bankruptcy Put Any Possible Future Tax Refunds in Jeopardy?

In some instances, a debtor loses the rights to a tax refund for the year he or she files the bankruptcy case. However, the vast majority of people keep their tax refunds.

Does Filing Bankruptcy Put Any Possible Future ESOP or Existing 401K Plans in Jeopardy?

Filing for bankruptcy does not offset your future right to invest in a retirement account. For those with a current 401k, the debtor will keep the 401k because the Supreme Court has ruled that 401k accounts are not property of the bankruptcy estate. Therefore, a debtor can discharge debt and keep his or her 401k.

Do Notices of Bankruptcy Get Filed or Posted in the Local Newspapers?

Simply put, the answer is unlikely. Personal bankruptcy filings do become public record after the filing process is complete; however, the odds of your files being accessed are very unlikely. The only place where your bankruptcy filing will show up is on the bankruptcy court’s website, where a person has to pay to find any information. Typically, only creditors and attorneys access bankruptcy information this way. For most people, nobody will know.

How To Rebuild My Credit?

The best starting point for rebuilding your credit is to start with your credit report itself. The three credit reporting agencies are Experian, Equifax, and TransUnion. You are entitled to one free copy of your credit report annually from each agency. You can obtain them over the internet at or by telephone at 1.877.322.8228. Your credit report tells you what information prospective creditors will see when you apply for credit. Potential employers and some auto insurance companies also use credit reports, so your report should be as accurate as possible.

Once you have established that the current information on your report is accurate, your next goal is to improve your credit score as much as possible with new credit references. A starting point in obtaining credit is getting one credit card. You may only qualify for a secured card, but even so, it can rebuild your credit. Once you have a credit card, make a small purchase each month (e.g. $25) and pay it off when the bill arrives. When you pay the balance due and avoid interest charges by not carrying balances over month to month, you show prospective creditors that you can manage your account.

Once you have established yourself with the one card, you might be anxious to apply for many more cards. Don’t get too carried away. Ideally, you should carry one or two bank credit cards, possibly one department store card and one gasoline card. Try not to charge everything on your bank credit card and not use your department or gasoline card. When creditors look in your credit file, they want to see that you can handle more than one credit account at a time. Do not build up interest charges on these cards. Rather, use them and pay the bill in full.

Another method to rebuilding credit is to apply for a small loan at your bank. After you’ve used a credit card for a time, you may decide to obtain a small consumer loan. Paying that loan on time will improve your credit score. Make sure you are on time with all of your payments, whether for a car loan, home loan, student loan or credit card. You must pay all your bills on time after a bankruptcy to build your credit effectively.

If you follow the steps outlined above, you can rebuild your credit within one to three years on average. If you aggressively build your credit after a discharge, you may be eligible for a home mortgage within three to four years.


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