Author: Kostopoulos Bankruptcy Law

Filing for Chapter 7 bankruptcy can feel like hitting a giant reset button on your financial life. 

But here’s the good news: it’s not the end of the road. You can absolutely rebuild your credit. Yes, even after bankruptcy. And if you’re living in Michigan, the steps are the same as anywhere else. 

It just takes some time, a game plan, and a bit of patience.

In this post, we’ll show you how to rebuild credit after Chapter 7 bankruptcy in Michigan.

#1 Check Your Credit Reports

First thing’s first, take a peek at your credit reports. This is your starting line.

After your bankruptcy is discharged, you want to make sure all the information on your credit reports reflects that. Sometimes creditors don’t update things properly, and old debts that should be gone still show up like ghosts haunting your financial life. 

Grab free copies of your credit reports from AnnualCreditReport.com. 

You get one free report from each of the three credit bureaus: Equifax, Experian, and TransUnion. 

Look through each one carefully. If something’s wrong like a debt that should’ve been cleared, dispute it. Getting your reports cleaned up sets the foundation for rebuilding.

#2 Build Good Habits With Bills

One of the fastest ways to rebuild your credit is also the simplest: pay your bills on time.

Your payment history makes up the largest chunk of your credit score, so even something as small as your cell phone bill can help.

Set yourself up for success by using autopay or calendar reminders so you don’t forget. If money is tight, you can prioritize essentials like utilities, rent, and minimum payments on any active accounts. 

Over time, those on-time payments stack up and tell future lenders you’ve turned things around.

Late payments can really drag you down, and after a bankruptcy, you’re in “prove it” mode with creditors. So this is the time to show them you’ve got things under control.

#3 Open A Secured Credit Card

Secured credit cards are awesome for rebuilding credit after Chapter 7. 

They work just like regular credit cards, but you put down a deposit up front which is usually a few hundred bucks. That deposit becomes your credit limit.

Also Read: Can You Get A Credit Card While In Chapter 13?

The trick here is to use it sparingly. Buy a tank of gas or a coffee here and there, then pay it off in full each month. That shows lenders you can borrow responsibly. 

After a few months, your credit score starts to climb. It’s slow, but it works.

Some solid secured card options include:

• Discover it Secured
  
• Capital One Platinum Secured
  
• OpenSky Secured Visa

These cards often report to all three credit bureaus, which is important for rebuilding.

#4 Consider A Credit-Builder Loan

This one’s a little less known, but super helpful.

Credit-builder loans are kind of the reverse of regular loans. Instead of getting the money up front, you make monthly payments into an account. When the loan term ends, you get the money back (minus interest). 

It’s like forced savings – with a credit boost attached.

Credit unions and some online lenders in Michigan offer these. Just search for “credit-builder loan near me” or ask your local bank. 

The payments get reported to the credit bureaus, which helps build your score over time.

#5 Avoid Too Many Applications

It’s tempting to apply for a bunch of credit cards or loans to “get back out there.” But pump the brakes.

Each application gives you a hard inquiry on your credit report. Too many of those in a short time can lower your score and make you look risky to lenders.

Also Read: Money Received After Filing Chapter 7

Instead, be selective. Go for one or two tools that will actually help you, like a secured credit card or a credit-builder loan from a Michigan bank or credit union. 

Use them wisely, show positive history, and give it time before applying for anything else.

This strategy not only protects your score but also helps you focus on managing the credit you do have, instead of juggling too many new accounts.

#6 Keep Balances Low

If you’re using credit cards (secured or regular) try to keep the balances low.

This is all about your credit utilization ratio. It’s a fancy term, but here’s what it means: don’t max out your cards. Let’s say you have a $300 limit. Try not to let your balance go over $90. That keeps your utilization at 30% or less, which is ideal. 

Even better? Keep it below 10% if you can swing it.

Using credit without overusing it tells lenders you’re responsible now. 

And your credit score reflects that.

#7 Monitor Your Progress

Keep tabs on how you’re doing. Seeing your score slowly climb can be super motivating.

There are a bunch of free tools out there to help with this. Two popular ones are:

• Credit Karma
• Credit Sesame

They give you access to your score, track changes, and even offer tips along the way.

You can also set up alerts for big changes or new accounts popping up on your reports. That way, if anything weird happens (like someone trying to open a card in your name) you’ll catch it early.

Also Read: Chapter 7 Allowable Living Expenses

#8 Be Patient, But Consistent

This part’s the toughest: waiting.

Rebuilding credit doesn’t happen overnight. It’s like planting a garden. You water it, give it sunshine, and wait. Same with your credit. Pay your bills, use your secured card, keep debt low, and then give it time.

The good news? You’ll probably start to see small improvements in just a few months. 

Bigger changes take more time like usually 12 to 24 months. But every on-time payment and every smart choice gets you closer.

Don’t go hard for three months and then forget about it. Keep the habits going.

Bottom Line

Rebuilding your credit after Chapter 7 bankruptcy in Michigan is 100% possible. Yes, it takes time. Yes, it takes effort. But it’s not rocket science.

Start by checking your credit reports and clearing up any leftover mess. Then get into a routine of paying bills on time, using a secured card, keeping balances low. Maybe try a credit-builder loan if it makes sense. 

And don’t overdo it with new applications.  

The most important thing? Don’t give up!

Filing for Chapter 13 can feel like a huge weight off your shoulders. Finally, there’s a plan in place. The constant calls from creditors slow down. You get a little room to breathe. 

But just because you’ve filed doesn’t mean it’s all smooth sailing from here on out.

Chapter 13 comes with a set of rules, and breaking them can throw your case off track. Some of these might seem minor, but they can have serious consequences if you’re not careful. 

In this post, we’ll go over 9 things you cannot do after filing Chapter 13.

#1 Skip Or Miss Plan Payments

The heart of Chapter 13 is your payment plan. You agree to make regular payments over three to five years. It’s basically the deal you made with the court and your creditors.

Missing payments is something you cannot do.

Your plan payments are how you show you’re serious. 

If you start skipping them, the court can dismiss your case. That means you lose protection from your creditors, and they can come after you again.

If something happens like a job loss, emergency, whatever, talk to your attorney and your trustee immediately. They might be able to modify your plan or help you pause payments temporarily. 

Just don’t ghost the system. It’ll only make things worse.

Also Read: Chapter 13 Payment Plan Example

#2 Take On New Debt Without Approval

Thinking of getting a new credit card or financing a new car right after filing Chapter 13?

Nope. You’re not allowed to take on new debt while you’re in the middle of your repayment plan unless you get court approval. That includes stuff like:

• Personal loans
  
• New credit cards
  
• Car loans
  

Why? Because it affects your ability to repay your current plan. You’re already working with limited funds, and adding more debt could throw everything off balance.

Now, if it’s an emergency (say, your car breaks down and you need it to get to work) you might be able to get approval. 

But again, don’t do anything without talking to your attorney first.

#3 Sell Or Transfer Property Without Permission

If you’ve got assets like a house, a car, or even something valuable like jewelry or collectibles, you can’t just sell them or give them away while you’re in Chapter 13.

Selling or transferring property without court approval is a no-go.

It might seem like no big deal. Maybe you’re thinking of selling that second car you never use or transferring ownership of your house to a family member. But the court wants to make sure you’re not trying to hide assets or avoid paying creditors what they’re owed.

Also Read: Chapter 13 Dismissal Refund

So if you’re thinking of selling, gifting, or transferring anything that has value, forget it. 

Talk to your lawyer. They can guide you through getting the proper permission.

#4 Stop Cooperating With Your Trustee

Your bankruptcy trustee isn’t your enemy. You may not love dealing with them, but cooperation is part of the deal.

That means turning in documents when asked, showing up to meetings, and keeping communication open.

If you stop responding, ignore their requests, or give them incomplete info, things can go sideways quickly. The trustee has the power to ask the court to dismiss your case. 

And if that happens? Back to square one with your debts.

So always work with the trustee. Respond to calls or emails. Hand over paperwork when asked. The more open you are, the smoother things go.

#5 Pay Creditors Outside The Plan

This might feel like a generous or sneaky move: “I’ll just pay my cousin back on the side” or “Let me toss a few bucks to this credit card.”

Nope. Bad idea.

In Chapter 13, payments to creditors are handled through your plan. You can’t just pay someone off on the side, even if it’s a personal loan or someone who’s been pressuring you. 

That throws off the fairness of the whole system. 

Everyone is supposed to get paid according to the plan, in order of priority.

If you start playing favorites or trying to get ahead of the plan, it can mess things up and possibly even get your case dismissed. So stick to the plan.

Also Read: What Can You NOT Do After Filing Chapter 7?

#6 Ignore Tax Obligations

Just because you’re in Chapter 13 doesn’t mean you get to ignore taxes. You still have to file your returns. You still have to pay any taxes that come due while you’re in the plan.

In fact, staying on top of taxes is a must.

If you don’t file on time or you rack up new tax debt during your plan, it can put your whole case at risk. The IRS doesn’t take that lightly, and neither does the court.

So make it a habit: file every year, and keep things current. 

If you’re struggling with taxes, let your attorney know. They can help you figure out what to do before it becomes a major problem.

#7 Change Your Income Without Notifying The Court

Got a raise? Switched jobs? Lost hours? Started a side hustle?

Whatever your income change is (up or down) you have to report it. The court and your trustee need to know, because it could affect your payment plan.

If your income goes up, the court might expect you to pay more toward your debts. If it drops, you might be able to reduce your payment amount. 

But that only works if you actually let someone know.

Trying to hide a new income stream or just keeping it to yourself isn’t worth it. If the court finds out later, it can cause all kinds of issues, from plan modifications to dismissal.

Also Read: Money Received After Filing Chapter 7

#8 Move Out Of State Without Notifying The Court

Moving? That’s fine, but not without telling the court and your trustee first.

When you file Chapter 13, the court keeps track of your location for all kinds of reasons. Mail. Hearings. Trustee communications. If you suddenly disappear or move out of state and no one knows where you went, it throws off the process.

Plus, if you’re moving to a new job or trying to adjust your income, your trustee needs to know that too.

So if you’re planning a big move, just make sure your attorney is in the loop and the proper notifications go out. It’s way easier than dealing with a case complication later.

You cannot move out of the state without approval after filing Chapter 13

#9 File Another Bankruptcy Immediately

Filing Chapter 13 isn’t something you can just do over and over like reapplying for a library card.

If your case gets dismissed or ends without a discharge, there are usually waiting periods (2 years) before you can file again. 

And if you try to file another bankruptcy right away, you might not get the same protections like the automatic stay that stops creditors from bugging you.

This isn’t a system you can game. It’s meant to help people, yes, but only if they follow the process. 

So, if you’re struggling with your current plan, don’t panic and jump to file again. Talk to your attorney about what options you have.

Bottom Line

Chapter 13 gives you a real shot at getting back on your feet financially. But once you’re in it, you’ve got to stick to the rules.

Don’t skip payments. Don’t borrow or sell stuff without permission. Keep your trustee in the loop. Pay your taxes. Report any income changes. Basically, be honest, stay on top of things, and communicate.

It might feel like a lot, but you’re not doing it alone. You’ve got a team (your attorney, your trustee, the court) that’s there to help. 

So lean on them when you need to, but also do your part.

Wondering if it’s even possible to get a credit card if you’re in Chapter 13 bankruptcy? 

Bankruptcy can feel like your financial world just flipped upside down, and adding a credit card into the mix might sound impossible. 

But guess what? It’s actually not.

Now, it’s not going to be as easy as walking into a bank and getting instantly approved. There are a few hoops, some rules, and some patience involved. 

In this post, we’ll show you how to get a credit card while in Chapter 13.

Can You Apply For A Credit Card During Chapter 13?

Yes, you can get a credit card while you’re in Chapter 13 bankruptcy, but you need approval from the trustee or the court first.

Chapter 13 puts your finances under the supervision of a bankruptcy court and trustee. Because of that, you can’t just run out and open new lines of credit without permission.

Also Read: How Long Will Chapter 13 Delay Foreclosure?

Most credit card companies aren’t eager to give out unsecured cards to someone in the middle of bankruptcy. From their point of view, you’re high risk. 

Plus, the court has rules that limit you from taking on new debt without approval. 

So while you can apply for a credit card, you’ll likely face two big hurdles: 

• Getting a lender to approve you
• Getting the trustee’s okay to even try

Secured Credit Cards As An Option

A secured credit card works differently than a regular card. Instead of being approved based on your credit score, you put down a cash deposit, usually the same amount as your credit limit. 

For example, put down $300 and you get a card with a $300 limit.

Because you’re essentially borrowing against your own money, banks see this as less risky. 

That makes secured cards the most realistic way for someone in Chapter 13 to get back into the credit game. 

Courts and trustees may allow this since you’re not piling on new debt in the traditional sense. It’s more like showing that you can handle credit responsibly again.

The big advantage is that secured cards report to the credit bureaus just like normal ones. 

Use them responsibly, pay on time, and your credit history starts to improve.

When Unsecured Cards Might Be Possible

Now, it’s not impossible to get an unsecured credit card during Chapter 13 – it’s just harder. 

Some smaller lenders, credit unions, or companies that specialize in “bad credit” cards might be more open to giving you a shot.

But there’s a catch (of course). These cards can come with high fees, crazy interest rates, or super low limits. If you’re not careful, you could actually end up hurting your credit even more. 

So if you do go this route, read the fine print like your life depends on it.

Also, again, you’ll need court or trustee approval first. 

Once your repayment plan is complete and the court officially closes your case, you’ll start to see more opportunities. Lenders view you as less of a risk because you’ve shown you can follow through with payments. 

That’s usually when unsecured card approvals become realistic again.

Also Read: Chapter 13 Payment Plan Example

How To Get A Credit Card During Chapter 13

If you’ve decided you want to try for a card while still in bankruptcy, here’s the basic roadmap:

#1 Talk To Your Bankruptcy Attorney

Seriously, this should be your first move. 

Your attorney knows the details of your case, your repayment plan, and your local court’s rules. They’ll tell you if it’s even worth applying right now or if you should wait a bit.

Also, they can help with the paperwork you’ll need to submit to the trustee or court. 

Trying to figure all that out solo can be a headache, and honestly, they’re there for exactly this reason.

#2 Get Trustee Or Court Approval

Once you’ve got your attorney on board, it’s time to get official permission. 

Depending on your case, this might involve a formal request to the bankruptcy court or just a quick approval from your trustee.

They’ll look at your budget and repayment plan and decide if a new credit card fits into that. 

They’re mostly checking that this won’t derail your financial progress. If it looks solid, they’ll usually say yes.

Also Read: Does A Chapter 13 Trustee Monitor Income?

#3 Explore Secured Card Options

Now comes the fun part: shopping around. 

There are lots of secured credit cards out there. Look for ones with:

• Low (or no) annual fees
• Reporting to all three major credit bureaus
• A refundable deposit
• Decent reviews from real people

Don’t rush this. You want a card that will help you build your credit, not drain your wallet.

#4 Apply For The Card

Once you’ve found a good option and gotten your approval, go ahead and apply. 

This part is usually pretty simple. The card issuer will likely do a credit check and may ask about your income or employment. Be honest.

If you’re approved, you’ll send in your deposit, and they’ll mail you the card.

#5 Start Small And Use Responsibly

Once you’ve got your card, don’t go on a shopping spree. Just use it for small things like a coffee here, a gas fill-up there, and pay it off in full every month.

You don’t have to carry a balance to build credit. 

In fact, it’s better if you don’t. Just show that you can borrow a little and pay it back on time. That’s what lenders love to see.

Also, keep an eye on your credit score. 

You should start to see small improvements over time. It’s a slow climb, but every point counts.

Bottom Line

Getting a credit card during Chapter 13 isn’t impossible, it just takes a lot of patience. 

A secured card is usually your best bet, and it can be a powerful tool for rebuilding. Unsecured cards are rarely available until after your case wraps up, and even then, they may start with higher rates or lower limits.

If you’re serious about getting a card during your plan, always talk to your attorney and trustee first. From there, take small steps and use the opportunity wisely.

 

So, you filed for Chapter 7 bankruptcy. Big step, right?

Now you’re wondering: What happens if I get money after I file?

Like, what if a paycheck lands? Or a surprise inheritance shows up? Can you keep it? Or does it go straight to the bankruptcy trustee?

You’re not alone – this question comes up all the time. The short answer: it depends on the type of money, when you get it, and if any exemptions can help protect it.

In this post, we’ll shed some light on what happens to money received after filing Chapter 7.

What Happens To Money You Get After Filing Chapter 7?

Chapter 7 bankruptcy creates what’s called a “bankruptcy estate.” That estate includes almost everything you owned or were entitled to when you filed.

The trustee’s job is to see if any of it can be used to pay creditors.

But after you file Chapter 7, the money you earn going forward is usually yours to keep.

So in simple terms, if the money was connected to something before you filed, the trustee might take it. If it’s tied to something after you filed, it’s generally safe.

Also Read: What can you not do after filing Chapter 7?

Now let’s go over a few specific situations because each one has its own rules:

#1 Paychecks And Wages

If you earned the money before filing, but the actual paycheck lands after, the trustee can usually claim that money.

Why? Because it was technically already yours when you filed – it just hadn’t hit your bank yet.

But! Money earned from your job after you file? That’s yours. 100%. The trustee can’t touch it.

So basically:

• Pre-filing work = potentially up for grabs.
• Post-filing work = safe and yours.

Might feel weird, but it makes sense once you think about it.

#2 Tax Refunds And Stimulus Checks

Tax refunds can get messy because they’re tied to the income you made before filing. Even if you don’t have the refund yet, the trustee may be entitled to it. The same goes for part of the refund if your filing date splits the tax year.

Trustees often prorate refunds based on how much of the year passed before you filed.

Stimulus checks, rebates, or government relief payments can be a little different.

Also Read: Will Filing for Bankruptcy Affect My Tax Return?

Some of them are treated like tax credits, which means they might be seen as part of your bankruptcy estate if the eligibility date was before filing.

Others are considered more like public benefits that you can keep.

So refunds and stimulus money are very case-specific. They’re definitely something to talk through with your attorney before filing.

#3 Inheritance, Life Insurance, And Divorce Settlements

This is where the famous “180-day rule” comes in.

If you become entitled to an inheritance, life insurance payout, or property from a divorce settlement within 180 days after filing, it can be pulled into your bankruptcy case.

The clock starts the day you file, not the day you actually receive the money.

Let’s say your aunt names you in her will, and she passes away three months after you file.

Even if the estate doesn’t pay out right away, the money is still considered part of your bankruptcy estate because you became entitled to it within that 180-day window.

But if something like that happens on day 181 or later, the money is yours to keep. That single day can make all the difference.

#4 Lawsuits And Settlements

Let’s say you’re in the middle of a personal injury lawsuit when you file. Or maybe you get into a car accident after filing and want to sue.

If the incident that led to the lawsuit happened before your bankruptcy, any settlement or award could become part of your bankruptcy estate.

The trustee can use that money to pay off creditors.

It doesn’t matter if you file the lawsuit later, it’s about when the injury or problem happened.

If the incident occurs after you file, you’re good. Any money from that is yours.

But heads up: lawsuit money is complicated. Sometimes parts of it are protected (like money for medical costs), and other parts aren’t. It’s definitely something to discuss with a lawyer if you’re in that boat.

#5 Gifts, Lottery Winnings, And Other Surprises

Sometimes money falls into your lap out of nowhere. Maybe you get a big birthday gift, maybe you scratch off a lottery ticket, or maybe a friend pays you back unexpectedly.

How that’s treated depends on when it happens.

• Gifts or winnings tied to before filing? That money can be part of the estate.
• Gifts or winnings after filing? Those are yours to keep.

Big gifts from family can sometimes raise eyebrows, though, especially if they look like a way to sneak money around the bankruptcy process.

For most people, small gifts and little wins aren’t a problem, but larger amounts can get complicated.

Also Read: Chapter 13 Payment Plan Example

How To Protect Your Money With Exemptions

Here’s the good news: even if something is technically part of your bankruptcy estate, you might still be able to protect it with exemptions.

Exemptions are laws that let you keep certain property, like some of your home equity, household items, retirement funds, and even a portion of cash or wages.

The exact exemptions depend on your state. Some states have generous “wildcard” exemptions that can be used to protect cash or anything else you choose. Others are much stricter.

Here’s where exemptions can come in handy:

• Protecting a tax refund you haven’t received yet
• Holding onto part of a personal injury settlement
• Keeping cash in the bank under a certain limit

But you usually have to claim the exemption when you file. If you don’t list it properly in your paperwork, you might lose out, even if the exemption could have saved that money.

This is one of the biggest reasons it’s worth having an attorney guide you.

Knowing which exemptions to use, and how to apply them, can mean the difference between keeping and losing money.

Final Thoughts

You’ve probably noticed a pattern here: timing is everything.

The date you file your bankruptcy basically draws a hard line. Any money you receive tied to events before that line can be taken by the trustee. Anything that happens after, usually not.

Planning your filing date carefully can make a huge difference.

If you’re expecting a tax refund or a potential settlement, it might make sense to wait (or speed up!) your filing depending on the circumstances.

Talk to someone who knows the ropes before jumping in.

Filing Chapter 7 bankruptcy can feel like a huge weight off your shoulders. You finally get that sense of relief, knowing there’s a way to deal with crushing debt and start over.

But filing doesn’t mean you’re suddenly free to do whatever you want.

Once the case is in motion, there are rules you’ve got to follow. If you step outside the lines, you could mess up the process, lose your discharge, or even land in hot water with the court.

In this post, we’ll go over What can you not do after filing Chapter 7.

#1. You Can’t Pick And Choose Who To Pay

Once your case is filed, you don’t get to decide who gets money and who doesn’t. The court takes control over how debts are handled.

That means you can’t slip cash to your cousin because you feel bad about borrowing from him, or pay off a buddy’s loan just because you’d rather square things with him first.

It might feel strange, but the whole point is fairness.

The trustee makes sure all creditors are treated the same way. If you try to favor someone, the court can actually claw back that money and redistribute it.

So, as much as you might want to take care of personal IOUs, you have to let the process work itself out.

Also Read: Can Personal Loans Be Included in Bankruptcy?

#2. You Can’t Sell, Give Away, Or Transfer Property Without Approval

Another big no-go is moving around property once your Chapter 7 case is active.

You can’t sell your car to a friend, give away jewelry to a family member, or “loan” assets to someone else so it looks like you don’t own them anymore.

That’s considered hiding or transferring assets, and the trustee will not take it lightly.

Some things you own may be exempt, meaning you get to keep them. But for nonexempt items, they’re technically part of the bankruptcy estate. The trustee has control over those.

If you move them around without permission, it could blow up your case.

So, it’s always better to be upfront and check first before making any decisions with property once the filing is in.

#3. You Can’t Get New Debt Carelessly

A fresh start is what Chapter 7 is all about, but it doesn’t give you a green light to go wild with credit cards.

If you go out tomorrow and start swiping for luxury items or taking out new loans, you’ll put yourself in a bad spot. Creditors and the court might see it as bad faith.

In some cases, debts you rack up right before filing can even be excluded from discharge.

It’s also tough to get new credit while the case is open anyway. Lenders know you’re in bankruptcy, so most won’t line up to offer loans. And honestly, you don’t want to fall right back into the same trap you just escaped.

This period is about stabilizing, not piling on more.

Also Read: Chapter 7 Allowable Living Expenses

#4. You Can’t Ignore Trustee Or Court Requests

After filing, you’ll get some homework. You’ll need to attend the 341 meeting, also called the meeting of creditors, where you answer a few questions under oath.

The trustee might ask for more documents like bank statements, pay stubs, tax returns, or proof of certain expenses.

You can’t just brush this off. If you don’t show up or refuse to provide what’s asked, your case can be dismissed.

That means no discharge, no clean slate, and all the stress of debt comes crashing back.

So, as annoying as it may be to dig up old paperwork, just get it done. Respond on time and keep the trustee in the loop. It’s way better to handle it upfront than deal with the fallout later.

#5. You Can’t Lie Or Leave Things Out

This one is simple: honesty is the backbone of bankruptcy.

You’ve got to lay it all out – debts, assets, income, everything. If you “forget” to list something or decide not to mention an account, you’re setting yourself up for trouble.

The trustee’s job is to dig through your finances. They’ll spot inconsistencies, and if they think you’re hiding things, your discharge can be denied.

Even worse, it could get referred for fraud investigation. It’s not worth the risk.

It might feel uncomfortable to be that transparent, but remember, the court has seen it all before.

Full disclosure is the only way to make the process smooth and get the relief you’re looking for.

#6. You Can’t Keep Secured Property Without Reaffirming Or Surrendering

If you’ve got a house, car, or anything tied to a loan, you can’t just keep it without making a choice after filing Chapter 7.

Chapter 7 clears unsecured debts like credit cards and medical bills, but secured debts work differently. If you want to keep that property, you’ll need to stay current on payments and, in many cases, reaffirm the debt.

That basically means you agree to keep paying under the same terms.

If you don’t, the lender has the right to repossess or foreclose, even if you’ve been paying.

Your other option is to surrender the property. That sounds harsh, but sometimes it’s the cleanest way to truly start fresh.

You can’t just hang on to secured property and stop paying. It doesn’t work that way.

Also Read: How Long After Chapter 7 Discharge Is the Case Closed?

#7. You Can’t File Chapter 7 Again Right Away

One last thing you can not do after filing Chapter 7: you can’t just hit repeat on Chapter 7 whenever you want. Once you get a discharge, you’re locked out for a while.

In fact, you have to wait eight years from the date you filed before you can file another Chapter 7.

That means you need to use this fresh start wisely. Budget carefully, build good habits, and try to set yourself up so you don’t end up back in the same spot.

It’s a one-shot deal for a long stretch, so make it count.

Bottom Line

Filing Chapter 7 is like hitting reset on your finances, but it comes with boundaries you’ve got to respect.

You can’t favor certain creditors. You can’t move property around without approval. You can’t hide assets, lie, or ignore the trustee. And you can’t keep secured stuff unless you keep paying.

The good news? None of these rules are here to trip you up. They’re in place to make sure the process is fair and that your fresh start really sticks.

If you’re honest, responsive, and careful, you’ll come out the other side in much better shape.

Think of Chapter 7 as the road back to stability. Stay in your lane, follow the signs, and before long, you’ll be moving forward debt-free.

Finding out your Chapter 13 bankruptcy has been dismissed can bring a mix of emotions. You might be frustrated, relieved, or just plain confused about what happens next.

One of the biggest questions people have at this stage is about their money.

After months or even years of sending payments to the trustee, you’re probably wondering if any of that cash is coming back to you.

In this Chapter 13 dismissal refund guide, we’ll go over everything you need to know.

Can You Get A Refund After Chapter 13 Dismissal?

Yes, you can get a refund after Chapter 13 dismissal under certain circumstances.

The important factor is what the trustee has done with your payments at the time your case is dismissed.

If there’s money still sitting in the trustee’s account that hasn’t been distributed to creditors, that’s the portion you can expect to see again.

On the other hand, if the trustee has already sent your payments to your creditors, that money is gone for good. There’s no way to reverse those transactions.

So the timing of your dismissal is super important.

For example, if the dismissal happens just before a scheduled distribution date, there’s a good chance more of your money will be returned to you.

Also Read: Chapter 13 Payment Plan Example

How Refunds Work After Chapter 13 Dismissal

When a refund is due, the process isn’t instant. The trustee’s office has to stop payments, do a review of your account, take out any approved costs, and then send whatever’s left back to you.

Here’s what that looks like in real life:

#1 Trustee Stops Distributions

The very first thing that happens is the trustee hits pause on all outgoing payments. That means no more money gets sent to creditors from your account.

This step happens quickly after the dismissal order is entered.

It’s basically the “freeze” button in the process, ensuring nothing else leaves your account while they figure out the final balance.

#2 Account Is Reconciled

Next, the trustee’s team combs through your account and checks every transaction.

They’ll look at how much you’ve paid in, what has already gone out to creditors, and what’s still sitting in the account.

This part is important because they need to be sure they’re not overlooking any pending payments or missed deductions. It’s a bit like balancing a checkbook.

Also Read: 9 Practical Chapter 13 Tips And Tricks

#3 Fees And Costs Are Deducted

Before you get a refund, the trustee is allowed to take out certain costs.

These might include the trustee’s percentage fee for managing your case, any unpaid court costs, or attorney’s fees that were approved as part of your bankruptcy.

These deductions are taken before the final refund amount is calculated, so the number you get may be smaller than you expect.

#4 Remaining Funds Are Refunded

Once all the math is done and deductions are taken, the trustee cuts a check for the rest.

This refund is mailed to the address they have on file, so if you’ve moved recently, updating your address with the trustee is very important if you want that Chapter 13 dismissal refund.

The check is usually the last step in the process, and in most districts, you can expect it a few weeks after your case is dismissed.

What You Won’t Get Back

It’s important to set realistic expectations about what will actually be returned to you.

Here’s what usually doesn’t make its way back:

• Payments already sent to creditors before dismissal.
• Attorney’s fees that were approved in your case.
• Court filing fees or other nonrefundable costs.

Once those funds are out the door, they’re not coming back. That’s why timing matters so much. If your case is dismissed right before a distribution date, you might luck out. If it’s dismissed right after, there might not be much left.

How Long Does A Chapter 13 Dismissal Refund Take?

Refunds don’t happen overnight. In most districts, you’re looking at about four to six weeks.

That’s because the trustee’s office has to go through the reconciliation process, handle any pending transactions, and get the refund approved before cutting a check.

Sometimes it’s faster, sometimes slower.

If you had wage deductions through your employer, it can take longer because payments might still be in transit to the trustee. They have to wait for those to clear before closing the account.

What To Do If You Haven’t Received Your Refund

If it’s been more than six weeks and you still haven’t seen a check, do follow up.

Start with the trustee’s office. They can confirm if a refund was issued and, if so, when and where it was sent. If you had an attorney during your case, let them know too. They can contact the trustee on your behalf and help figure out any holdups.

Also, check the court docket online.

Many times, the trustee will file a “Notice of Refund” or similar entry when the money is sent out.

Also Read: How Soon Can You File Chapter 13 After Chapter 7?

Tips To Speed Things Up

While you can’t make the trustee work faster, you can make sure you’re not accidentally slowing things down. Here’s what we recommend doing:

• Double-check that the trustee has your current mailing address.
• If your wages were being garnished for payments, ask your employer to stop the deductions immediately after dismissal.
• Make sure there are no pending disputes in your case that could be holding the funds.

These little steps can help shave off some of the waiting time and avoid unnecessary delays.

Bottom Line

Getting a refund after a Chapter 13 dismissal is possible, but it’s not guaranteed. It all comes down to whether there’s any money left in the trustee’s hands when your case ends.

If there is, they’ll reconcile your account, deduct any allowed costs, and send you what’s left.

Be patient with the process, but stay proactive. Keep your contact info updated, check in if things take too long, and loop in your attorney if you have one.

With a little follow-up, you can make sure any money you’re owed finds its way back to you.

 

Filing for Chapter 7 bankruptcy is a big step, and one of the most confusing parts is figuring out what expenses you’re actually allowed to keep.

The court doesn’t expect you to go without food, housing, or basic necessities.

But it also won’t let you keep spending like nothing’s changed. There are rules around what’s considered a “reasonable” living expense, and those rules can feel a little murky when you’re just trying to get back on your feet.

In this post, we’ll break down all the Chapter 7 allowable living expenses.

#1. Housing And Utilities

Keeping a roof over your head is obviously a must and the bankruptcy court gets that.

You’re allowed to claim reasonable rent or mortgage payments as part of your necessary expenses.

The key word here is Reasonable. If you’re living in a massive luxury home with sky-high payments, you might have to make some changes.

Your housing expenses also include things like:

• Electricity
• Water
• Gas
• Trash collection
• Basic phone service

You can even include renters or homeowners insurance. If you pay property taxes separately, those can go in too.

What you can’t do is justify a crazy-high utility bill from cranking the AC with the windows open. It has to make sense to the trustee reviewing your case.

Also Read: 341 Meeting Of Creditors Questions

#2. Food, Clothing, And Other Necessities

You’re still allowed to eat. You’re still allowed to wear clothes. And yes, you can buy toothpaste and toilet paper. All the basic day-to-day stuff you need to get through life is allowed.

There are national standards for food and clothing expenses, and they’re based on your household size.

The court doesn’t expect you to survive on beans and rice, but don’t expect them to sign off on gourmet steaks and designer shoes either.

Personal care items also fall into this category, so shampoo, soap, feminine hygiene products, and so on. Cleaning supplies for your home count too.

Just think “everyday life basics,” and you’re on the right track.

#3. Transportation

Getting around is another Chapter 7 allowable living expense.

That includes owning a car, but again, the court’s looking for reasonable here. Driving a modest, reliable vehicle? Fine. Still making $800/month payments on a tricked-out sports car? That’s gonna raise some eyebrows.

Transportation expenses can cover:

• Gas
• Car insurance
• Maintenance and repairs
• Bus passes or train tickets if you don’t have a car

The idea is that you need to be able to get to work, take your kids to school, hit the grocery store, or make it to doctor appointments. That’s all fair.

Also Read: Chapter 13 Payment Plan Example

But you just can’t claim transportation costs that are way above normal.

#4. Health Care

Health care costs can add up fast, so this is another area where the Chapter 7 court allows for some breathing room. You’re allowed to budget for:

• Health insurance premiums
• Doctor’s visits
• Dental work
• Prescriptions
• Medical supplies
• Vision care

If you or someone in your household has a chronic condition or ongoing treatment, you’ll want to document that clearly. The trustee needs to see it’s necessary and not just a one-off.

Also, if you’ve got co-pays or out-of-pocket costs your insurance doesn’t cover, those can be included too.

You just need to be able to show they’re legit.

#5. Taxes

The court isn’t going to stop you from paying your taxes.

If you’ve got tax bills that aren’t being wiped out by the bankruptcy, those are allowed as necessary expenses. That includes federal, state, and local income taxes.

Real estate taxes and self-employment taxes also fall into this category, if they apply to you.

As long as they’re legally due and you’re not just estimating, you’re good.

Keep copies of tax bills or payment plans if you have them.

#6. Court-Ordered Payments

If a judge told you to pay it, it’s allowed. That means stuff like:

• Child support
• Alimony
• Restitution
• Other court-ordered fines or payments

These aren’t optional. And the bankruptcy court knows that. So they’re considered priority expenses and won’t be questioned, as long as they’re documented and current.

If you’re behind, the trustee might ask how you plan to catch up, but the regular monthly amounts are usually allowed with no pushback.

#7. Education (Under Limited Circumstances)

You can’t just toss in private school tuition and expect it to fly. But there are some cases where education expenses get approved.

Usually, it has to be something essential like special education for a child with unique needs or job-related training for yourself that’s required to stay employed.

So no, the court isn’t going to let you claim yoga teacher training or send your kid to a $20,000-a-year prep school unless there’s a very specific reason.

If you’re trying to include this, expect to provide extra documentation and a strong explanation.

#8. Childcare

If you work and need childcare, you can include it.

This is a common and accepted expense, especially for single parents or households with two working adults. Babysitters, daycare, after-school programs – those all count.

Also Read: What Happens If Chapter 7 Is Denied?

But don’t stretch the truth. If Grandma watches your kids for free, that’s great, but you can’t claim a childcare expense just because it’s convenient.

Like everything else, this one has to be real and justifiable.

What Living Expenses Are NOT Allowed In Chapter 7?

Now let’s talk about what doesn’t make the cut. The Chapter 7 court’s main focus is on what you need to live, not what makes life more fun or fancy.

Here are a few things that are almost always rejected:

• Subscriptions like streaming services, satellite radio, monthly box clubs
• Entertainment like movie tickets, concerts, vacations, eating out
• Luxury services like housekeeping (unless medically necessary), spa treatments, gym memberships
• High-end phones and plans. The trustee might allow a basic smartphone, but not the latest model with an unlimited premium plan
• Excessive pet expenses, but basic pet care might be okay though.

In short, if it sounds like a luxury, the court will probably treat it like one.

Bottom Line

Chapter 7 isn’t a punishment. It’s about getting a clean slate while still giving you the essentials you need to function. You’ll still have a place to live. You’ll still be able to eat, get around, go to work, and take care of your health.

But it’s not the time for indulgences. The court wants to see that you’re making smart, necessary choices with your money.

Keep your lifestyle simple, focus on what you truly need, and you’ll be fine.

And if you’re ever unsure about what’s allowed, talk to a bankruptcy attorney. They’ve seen it all and can help you avoid making mistakes that could slow down or mess up your case.

 

Trying to wrap your head around a Chapter 13 bankruptcy plan? You’re not alone. It’s one of those things that sounds way more complicated than it actually is.

At its core, it’s just a structured way to pay back some (or all) of your debt over time based on what you can actually afford.

In this post, we’ll do a super simple Chapter 13 payment plan example. You’ll see how the payments are figured out, what debts get priority, and what happens if you can’t pay everything back.

Chapter 13 Plan Example Scenario

Let’s imagine someone named Sarah. She’s got a steady job, a small house, and a car she needs to get to work. Life threw some curveballs her way like unexpected medical bills, credit card debt, and she fell behind on her mortgage for a bit.

It’s nothing too extreme, but enough to feel stuck.

Here’s a quick snapshot of her situation:

• She earns $4,500 a month
• Her necessary monthly expenses (rent, food, utilities, gas, etc.) are about $3,200
• She owes $20,000 in credit card and medical bills (unsecured debt)
• She’s behind $5,000 on her mortgage
• She still owes $10,000 on her car loan
• Attorney and trustee fees add up to about $3,000

So how do we turn all that into a manageable payment plan? Let’s look at her Chapter 13 plan example so you can get an idea.

Also Read: Practical Chapter 13 Tips And Tricks

How The Monthly Payment Is Calculated

First, the court wants to know how much Sarah can reasonably afford to pay each month. This is called her disposable income, which is basically what’s left after the bills are paid.

Sarah’s disposable income looks like this:

• $4,500 (income) – $3,200 (necessary expenses) = $1,300

So, she’s got $1,300 each month that could go toward her plan.

There are some debts that must be paid through the plan. Certain debts like her missed mortgage payments, her car loan, and any court or attorney fees have to be paid in full.

Here’s what she’s working with:

• $5,000 for mortgage arrears
• $10,000 for the car loan
• $3,000 for trustee/attorney fees

That’s $18,000 total in must-pay debts.

Her plan will last 60 months (5 years), which is common in Chapter 13.

Also Read: Can Chapter 13 Take A Settlement Check?

Multiply $1,300 x 60 months, and that gives her $78,000 total to work with.

After she pays the $18,000 in required debts, she’s still got $60,000 left in her plan that can go toward the rest.

What Happens To The Rest Of Your Debt?

Once the required stuff is paid, whatever’s left over in your monthly plan can be applied to unsecured debts like credit cards, medical bills, personal loans, and old utility bills.

In Sarah’s case, she owes $20,000 in unsecured debt. And she’s got $60,000 of space left in her plan after the secured debts are covered.

So yes, she can afford to pay the whole thing off.

But here’s the important part: if she couldn’t afford to pay all of it back, that’s okay too.

Chapter 13 doesn’t demand full repayment of unsecured debt unless you have the income and assets to do it.

Let’s say her disposable income had been just $300/month instead of $1,300. That would’ve added up to $18,000 over 60 months. After paying off the mortgage, car, and fees, there might not have been anything left for those credit cards. And that’s fine.

Also Read: What Happens to Student Loans in Chapter 13?

At the end of the plan, any remaining unsecured debt can be discharged, which is a fancy way of saying wiped out. Clean slate.

What If You Can’t Pay It All Back?

This is a big worry for people, and totally understandable.

But Chapter 13 isn’t about punishing you for not being able to pay every cent. It’s about creating a realistic, structured way to handle your debt based on your actual situation.

The court knows not everyone can pay everything back. That’s why unsecured creditors often only get a fraction of what they’re owed. Sometimes it’s 100%, sometimes it’s 10%, and sometimes it’s literally nothing.

It depends on what you can afford and what you own.

Here are a few things that can affect how much unsecured debt you need to pay back:

• How much disposable income you have each month
• The total value of your non-exempt assets (stuff you’d have to give up in Chapter 7)
• The length of your plan (usually 3 or 5 years)

If you can only afford small payments, your plan will reflect that.

As long as you stick to the terms and complete the plan, any remaining qualifying debt at the end goes away. No collectors. No lawsuits.

Bottom Line

Your Chapter 13 payment plan is built around what you can reasonably afford and not some impossible number. Debts like your mortgage and car loan are handled first, then whatever’s left gets divided up for the rest.

If you can’t pay it all, that’s okay. The whole point of Chapter 13 is to give you space to breathe and time to catch up, without the nonstop pressure of creditors breathing down your neck.

And once your plan is done, you walk away with a lot less debt and a lot more peace of mind.

If you’re thinking about filing, or just trying to get a clearer picture of what this might look like for you, it helps to map out your own numbers.

You don’t have to figure it all out on your own. But now that you’ve seen a real-life example, it probably feels a little less overwhelming. And that’s a pretty good start.

If you’re heading into a 341 meeting of creditors and feeling nervous, you’re not alone.

It’s one of the most talked-about parts of the bankruptcy process, mostly because people aren’t sure what to expect.

But the truth is that it’s usually short, pretty straightforward, and way less scary than it sounds.

This meeting gives the bankruptcy trustee (and sometimes creditors) a chance to ask you questions about your financial situation. You’ll be under oath, but it’s more of a “organized paperwork check-in” than courtroom drama.

In this post, we’ll go over 30+ common 341 meeting of creditors questions you could get asked.

Basic Identity And Process Questions

These are the first things you’ll be asked, right after verifying your ID and Social Security number. They’re just making sure you’re you and that you understand what you filed.

Here are some 341 meeting of creditors questions in this category:

1. State your full name for the record.
2. Did you review and sign your bankruptcy petition, schedules, and statements?
3. Is all the information true and correct to the best of your knowledge?
4. Have there been any changes since you filed?
5. Did you list all your assets and debts?
6. Do you understand the consequences of filing for bankruptcy, including the effect on your credit?

They’re confirming that you were honest on your forms and didn’t leave anything out. Just take your time and answer clearly.

Also Read: Signs Your 341 Meeting Did Not Go Well

Financial And Asset-Related Questions

This is where things get a little more detailed.

The trustee wants to know what you own and if there’s anything that could be used to repay your debts. Most of the time, people filing Chapter 7 don’t have assets that the trustee can take. But they still need to ask.

Some common questions you might hear include:

1. Do you own or have any interest in real estate? (Home, land, timeshares, etc.)
2. Have you transferred or given away any property in the last 2 years?
3. Do you have any claims or lawsuits against anyone?
4. Have you recently repaid any loans to family or friends?
5. Do you expect to receive any inheritance, tax refund, or insurance payout soon?
6. Are you entitled to a business interest or partnership?
7. Have you sold or refinanced any property in the past few years?
8. Are you holding property for someone else?

If you’ve already listed these in your paperwork, great. You just need to confirm it all out loud. Think of this like walking the trustee through a snapshot of your financial life.

And don’t stress if you don’t have a lot. Most people who file don’t. That’s the point.

Also Read: Does A Chapter 13 Trustee Monitor Income?

Income And Expense Questions

Next up, the trustee might want to get a sense of how much money you’ve got coming in, and where it’s going out. This part is all about your budget.

Here are some of the 341 meeting of creditors questions you’ll get asked in this area:

1. Where do you work and what is your monthly income?
2. Is your income stable or has it changed recently?
3. What are your monthly expenses?
4. Do you receive any other income like child support, alimony, or government benefits?
5. Have you filed all required tax returns?
6. Have you made any large purchases or taken on any new debt recently?

They just want to see if your budget lines up with what’s in your paperwork.

If something doesn’t match, it’s usually not a big deal. Just be honest and explain.

Miscellaneous And Trustee-Specific Questions

Now we’re getting into the grab-bag. These questions depend a lot on the trustee and your specific case. They might dig into certain things based on what they see in your paperwork.

Here are some examples:

1. Why did you decide to file for bankruptcy now?
2. Did anyone help you prepare the paperwork?
3. Are you currently married, divorced, or separated?
4. Did you take the required credit counseling course before filing?
5. Did you complete the financial management course after filing?
6. Have you filed bankruptcy before? When and what chapter?
7. Do you have any questions for me (the trustee)?

They’re looking to make sure there’s no shady stuff going on. If you haven’t done anything weird, there’s nothing to worry about. Again, just be honest.

Also Read: Can I Buy A Car After 341 Meeting?

Some trustees are more thorough than others. Some zip through the questions, others take their time. Just roll with it.

What Creditors Might Ask (If They Show Up)

Okay, so here’s the part everyone worries about: what if my creditors come?

Most of the time, they don’t. Seriously. It’s rare. But sometimes, a creditor will attend if they think something’s fishy or they just want clarification.

If they do show up, here’s the kind of stuff they might ask:

1. Did you intend to repay this debt when you borrowed it?
2. Did you make any large purchases right before filing?
3. Was this account used to buy luxury items?
4. Did you take out a cash advance before filing?
5. Do you have any collateral that belongs to us?
6. Can you explain a specific transaction on your account?

It’s not common, but it happens. If they show up, don’t panic. You can answer their questions honestly, and your attorney (if you have one) can step in if needed.

Just remember, this isn’t a trial. It’s more like a Q&A.

Some Quick Tips

The 341 meeting is rarely as intense as people expect.

Start with the basics: bring your ID and proof of your Social Security number as they won’t begin without those, and take a few minutes the night before to review your paperwork, just to refresh your memory.

When answering questions, keep it simple. Say what you know, and if something slips your mind or you’re unsure, it’s completely fine to say you don’t remember.

Also dress neatly (no need to go full business formal) and try to stay calm.

Most people walk out thinking, “That was it?”, and chances are, you will too.

Bottom Line

The 341 meeting might sound intimidating, but it’s more of a formality than a trial. The trustee wants to verify your paperwork and check for any missing info.

Most people are in and out in less than 10 minutes.

It helps to be prepared, know your stuff, and keep your cool. If you’ve been honest in your filings, there’s nothing to stress about. Take a deep breath, show up on time, and answer their questions clearly.

Once this meeting is over, you’re one step closer to that fresh financial start. You’ve got this.