What is Emergency Bankruptcy Filing?

If you’ve begun to research bankruptcy filing, it probably sounds like a painful, convoluted process. It is certainly convoluted.

And if you are facing foreclosure and have debt collectors threatening to garnish your checks, seize your assets, or put liens on your property, it may seem like you do not have time to prepare a lengthy bankruptcy filing, including credit counseling and court hearings.

The good news is this: it is absolutely possible to file an emergency bankruptcy petition. Furthermore, the moment you file a bankruptcy petition, an automatic stay on those collection activities takes effect – keeping foreclosure, debt collectors, liens, and seizures at bay. And perhaps just as importantly, it keeps these debt collectors from harassing you on the phone and via the mail while you do your best to get your financial life back in order.

What is an Emergency Bankruptcy Petition?

An emergency bankruptcy petition is typically filed as a “skeleton“ filing. This means it is, in a way, intentionally defective. While it would take substantial time to dig through all of your assets and debts to fill out bankruptcy petition paperwork properly (say that five times fast), it takes almost no time at all to put together a filing that is missing most of the information. This is done intentionally to get the case started, and to get the stay in place so that you don’t have to be kicked out of your home via foreclosure or face other immediate consequences while you are trying to get your bankruptcy filing going.

However, these skeleton filings should only be done with the help of an experienced attorney. The reason for this is that a skeleton filing will have to be amended with a proper filing pretty quickly — the court doesn’t want stale skeleton filings blocking up their docket and people taking advantage of the automatic stay with no intention of actually pursuing a bankruptcy. Instead, this is seen as a quick emergency measure to buy you time to fill out the paperwork properly within a few weeks or so.

Are There Downsides to an Emergency Bankruptcy Filing?

One downside might be the cost. If you are paying an attorney hourly, it will take them more time to prepare an initial emergency petition and a follow-up proper filing while the stay is in place and you have extra time. Even if they don’t charge by the hour, many attorneys will charge an extra fee to do the emergency filing and a second filing later. That might be worth it, depending on how close you are to foreclosure and how immediate your need for relief is.

What are the Benefits of an Emergency Bankruptcy Filing?

The biggest benefit is immediate relief. Once a bankruptcy filing is on the docket, there is an automatic stay of that collection activity. For someone who is about to be kicked out of their house, that is a very, very big deal. Now, the bank cannot proceed with foreclosure, at least until the bankruptcy filing and case are done.

What is Required for an Emergency Bankruptcy Filing?

This will depend heavily on your local court clerk’s rules. You will definitely need a voluntary petition for bankruptcy. On the petition, you will list all the creditors to whom you owe money. You can pull this information off of recent bills or statements, check your credit report, or look it up online. You’ll have to provide your personally identifiable information, such as name, address, Social Security number, and date of birth, to the court. 

All of that is pretty standard across the country. And depending on local rules, you may have to file other paperwork such as a case cover sheet and an order of dismissal that the court will process if you fail to submit the remaining documents for your bankruptcy petition.

Is an Emergency Bankruptcy Filing Right for Me?

That’s impossible for us to answer, but it is a good question to discuss with a bankruptcy attorney. Really, the conversation will come down to how quickly you need relief. If you are on the verge of becoming homeless through eviction or foreclosure, if your assets are being seized or frozen, or if the harassment is just getting to be so much that you can’t handle it, an emergency filing can put a pause on all of that. 

But it will require extra work and likely extra expense. It is also a fraught path for DIY types — between local rules and short time frames, you have to take your skeleton filing and turn it into a real one to the satisfaction of the court clerks, the court itself, plus the bankruptcy trustee, all in a very short time after filing that initial skeleton petition. An experienced attorney can take care of all of this for you, helping you to make sure you outlined the right assets and debts (remember that if you leave something off the petition, it may not be discharged), filing your skeleton petition, and making sure that you do not miss the deadline for amending the petition with a real filing. If you are facing a financial emergency and need to proceed with an emergency bankruptcy filing, talk to an attorney near you today.