Emergency Bankruptcy And What You Need To Know

Though it is not advised, a debtor may file an emergency bankruptcy petition. A bankruptcy is a planned procedure that requires that all the information you include in your petition is as accurate as can be. If you have the time to think about bankruptcy, then you will not want to consider an emergency bankruptcy procedure. However, if you are a debtor that is facing foreclosure or lawsuits, you may file an emergency bankruptcy petition. An emergency bankruptcy petition provides the same protections that prevent creditors from pursuing a debt. A debtor may proceed with an emergency bankruptcy procedure if they are able to provide a) a statement of their social security number (SSN), b) a contact list of all creditors, c) a certificate that indicates the debtor completed the credit counseling course or a statement that explains why the debtor is exempt, d) a voluntary petition, e) the court filing fee.

Upon filing these documents, you are protected by automatic stay laws. This means that your debtors may no longer pursue wage garnishment, lawsuit, foreclosure, repossession, or any other debt collecting activity. The documents mentioned above is all that an attorney requires in order to start your bankruptcy petition. Once you submit the required documents an attorney will be in charge of contacting all of your creditors to inform them about your bankruptcy and of your protection from debt collection. If you are in a hurry and you need protection from debt collectors, you may want to speak with an attorney about your case. In many cases, you will require the attention of an attorney that is capable of walking you through the bankruptcy proceedings that requires you to meet many deadlines. In addition, an attorney will make sure that your information is correct so that your case will be filed correctly the first time.

To speak to the Bankruptcy Attorney, you may contact us at 424-285-5525. We are ready to help guide you through your bankruptcy case. 

Debtors are highly encouraged to take as much time as they need before they decide to file a bankruptcy. A bankruptcy petition requires that the debtor fill out statements of all of their financial affairs including a statement of their assets, properties, and debts. When you file a bankruptcy petition, you want to make sure that all the information you input is truthful and accurate. Debtors that fail to provide all the information required by a bankruptcy petition may find themselves in a lawsuit or may find that their case is dismissed. For these reasons, we believe you should contact an attorney before you consider this big step.

What is an emergency bankruptcy good for?

An emergency bankruptcy is not for everyone. In fact, you should avoid filing a bankruptcy in a rush if you have the time to do so. An emergency bankruptcy is right for individuals that do not have the time to file all of the paperwork that is necessary for a bankruptcy. The bankruptcy court allows individuals to seek automatic stay protection without a completed bankruptcy petition. However, you will be required to complete the petition in the following days.

An emergency bankruptcy is good for people who wish to stop a lawsuit or court proceeding for failure to pay a debt. For instance, Wendy has received notice of a wage garnishment. She knows that she will not be able to keep up with her payments if her wage is garnished. She has tried to contact the creditor to pursue a debt settlement but they do not comply. Wendy may consider a bankruptcy to prevent a wage garnishment. If Wendy has earning potentials, she may submit a bankruptcy petition under Chapter 13. A Chapter 13 will allow Wendy to keep all of her belongings and establish a repayment program to pay off her creditors. Through a Chapter 13, she will be able to create a repayment program that is appropriate for her earning potential. At the end of the Chapter 13 repayment program, Wendy will have all dischargeable debt discharged.

In another instance, Tom has received notice of foreclosure. He does not want to lose his house so he files a Chapter 13 bankruptcy. Tom will be capable of stopping the foreclosure after filing for bankruptcy. In his case, he would be protected by automatic stay laws after he files the appropriate documents.

An emergency bankruptcy is for someone that is coming near a foreclosure or lawsuit or who are trying to prevent wage garnishment. If you do not have time to file a complete bankruptcy petition, you may file the bare minimum and later file the rest. The debtor will usually have about 14 days to file the rest of the petition.

Automatic stay

As mentioned earlier, a debtor will consider an emergency bankruptcy when they are in need of an automatic stay. An automatic stay is a section of the bankruptcy law that prevents any creditor from seeking payment once the debtor has filed a bankruptcy petition. The automatic stay protection takes effect as soon as you file the basic bankruptcy documents, this means that you do not have to wait until your bankruptcy is approved before you are placed under automatic stay protection. Debtors that file for bankruptcy can file a lawsuit against creditors and debt collectors that pursue any debt collecting activity after a bankruptcy is filed.

If a debt collector or creditor wants to pursue a lawsuit after the automatic stay is in place, the creditor or debt collector will need to file a motion to lift the automatic stay. The creditor and/or debt collector may accomplish this if they are able to prove that the debtor is committing fraud, hiding property, or has provided inaccurate information. When you rush bankruptcy and you provide inaccurate information, your creditors may use this against you to lift the automatic stay and pursue any debt collection. To avoid missing information in your bankruptcy statement and to assure that all your statements are as accurate as can be, you will want to work with an attorney.

An automatic stay is usually the biggest reason that a debtor will consider an emergency bankruptcy. It is important to file all your documents and meet all the required deadlines to ensure that your emergency bankruptcy is honored.

Bankruptcy Counseling

Individual or married debtors may file an emergency bankruptcy under Chapter 7 or under Chapter 13. In both cases, the debtor will be required by law to complete a bankruptcy counseling prior to submitting their paperwork to the bankruptcy court. The bankruptcy counseling can either take place in person, on the phone, or through an online course. Upon completion of the counseling, you will receive a certificate of completion which will be submitted along with your bankruptcy petition. This is probably the most time-consuming portion of an emergency bankruptcy procedure, so take care of this step as soon as possible. The rest of the petition does not rely on external factors meaning that you can take care of the next steps yourself. The rest of the basic requirements can be filled out in a short amount of time.

Emergency Bankruptcy Petition

As mentioned earlier, in order to file an emergency bankruptcy, you will need to have submitted the following documents to the bankruptcy court a) a statement of your social security number (SSN), b) a contact list of all your creditors, c) a certificate that indicates you completed the credit counseling course or a statement that explains why you are exempt, d) a voluntary petition, e) the court filing fee. Without these basic documents, you will not be protected by automatic stay laws.

The good news is that after you submit your documents, you are under the protection of automatic stay. A creditor or debt collector may no longer call or email you about any debt collecting activity. It is crucial that you contact your creditors as soon as you submit your bankruptcy to ensure that they are aware of the automatic stay. When a bankruptcy is rushed it may not give the court enough time to contact your creditors, so make sure that you contact the creditors after filing. If you are working with an attorney he or she will make sure that your creditors receive news of your bankruptcy.

Individuals who file a Chapter 7 will have to submit proof that they are eligible for a liquidation. If they are not capable of filing a Chapter 7 they may file through Chapter 13. Chapter 13 allows individuals with higher earning potentials to file for bankruptcy. When you are filing an emergency chapter 13 you will only be required to submit proof that you have an income.

What happens next?

After you file your emergency bankruptcy petition, you will have fourteen days (unless you request an extension) to fill out the rest of your bankruptcy petition. The rest of your bankruptcy petition will include all other information that you did not include in your emergency bankruptcy. A complete bankruptcy petition should include the following information:

  • The voluntary bankruptcy petition:
  • A statement of all of your assets, properties, and liabilities
  • A statement of all of the property you will exempt from your bankruptcy (for Chapter 7)
  • A statement that includes the contact information of all of your debtors and the amount owed to each
  • A statement of any coeditor
  • A statement of your income
  • A statement of financial affairs
  • A statement of your social security number
  • Completion of a means test for debtors that are applying for a Chapter 7

These documents will be required so that the bankruptcy court may proceed with your case. Keep in mind that when you file an emergency bankruptcy petition, the automatic stay protection kicks in as soon as you submit your documents, but this does not mean that you are done. In order to keep the protections under the automatic stay, you will want to make sure that all of your documents are filed within two weeks of filing your bankruptcy.

After you successfully file your documents, you will be required to attend a creditors meeting. During a creditors meeting, you will be placed under oath and you will be required to answer any questions that a creditor may have regarding your financial affairs. During this time a creditor may ask you about your expenses, about your secured property, and about a new credit line. A creditors meeting is a requirement in every bankruptcy case under section 341 of the bankruptcy law. If you fail to attend your bankruptcy meeting you will have your bankruptcy case dismissed and you may no longer be protected under the automatic stay.

Once you finish your required creditors meeting otherwise known as the 341 meeting, you will receive a court decision. The court may either approve or deny your request. If the court approves your request, you will have your debt discharged if you are filing for a Chapter 7. If you are filing through a Chapter 13 and your bankruptcy is approved, it means that your repayment program has been approved. If your request is denied after filing a Chapter 7, it means that you either did not meet certain deadlines or that the information you provided is inaccurate. You may have time to fix your information or the court may decide to dismiss the case in which case you will have to wait 180 days before you can apply again. If your Chapter 13 bankruptcy petition was not approved it means that your creditors did not approve the repayment program. The debtor will have the opportunity to fix their repayment program so that it may be approved by the creditors.

Filing a bankruptcy is a very big step that will impact your credit history. You want to make sure that a bankruptcy is a right thing for you before you engage with bankruptcy paperwork. A bankruptcy has many benefits but it is important to keep in mind that it is not the only option to settle your debt. Individuals that are in need of a bankruptcy attorney, may contact the bankruptcy attorney at 424-285-5525. We are ready to hear your case and help you decide the correct measures for your case. Our attorneys are experienced in bankruptcy law and can help you make an appropriate decision about your situation.