Emergency Bankruptcy Filing
Filing a bankruptcy petition is usually a long and potentially arduous process. There are many forms to fill out which can take a lot of time to fill so that all assets are properly exempted, creditors properly listed for notice purposes, and most importantly the Means Test and current budget correctly calculated to ensure eligibility. However, if you are facing an emergency situation, you can fill out a portion of these to get the process started to invoke the automatic stay protection of the Bankruptcy Code. This is usually important for someone who is facing a wage garnishment or foreclosure that they need to stop without having the necessary time to complete the petition properly.
Before the bankruptcy petition (even in an emergency form) is filed, you will need to take a court-approved credit counseling class. This class can be taken online or over the phone. The class usually will only require passing a quiz/test at the end to receive the certificate of credit counseling and a follow up call with the credit counselor to go over class. In addition to the certificate of completion of the credit counseling course, it is necessary to list your creditors and complete Form 1 of the voluntary petition.
Once the case has been filed and a case number assigned, the automatic stay prohibits almost all creditors from continuing their collections against you. Any actions at that point without a court approval will be deemed a violation of the bankruptcy stay and can be reversed. From the filing of your emergency filing date, you will have 14 days to file the rest of your bankruptcy petition. In regards to a Chapter 13, the repayment plan will also need to be filed in those 14 days. You must also make your first plan payment within 30 days of initial filing, not after the completion of your petition. If the balance of your documents are not filed timely, the Court will dismiss your case and you will still have been considered to have file a bankruptcy.
Many individuals think they play the system by filing repeat emergency petitions just to invoke the automatic stay and stop a foreclosure or other legal event. To prevent repeat filers from doing this, the Bankruptcy Court has come up with a three strike rule. On the first filing, the Debtor has the full automatic stay for the whole duration of their bankruptcy case. However, the second case filed within one year of the initial petition is only provided 30 days of automatic stay, meaning that on the day that you file your emergency petition; you must file a Motion to Extend or Continue the Automatic Stay so that your protection continues for the full term of your petition. However, the third petition that is filed within a year of the initial petition is provided NO automatic stay protection from the start of the case, meaning that typically the creditor can still proceed with their collection attempts as if there was no bankruptcy protection in place. It is necessary at that point to file a Motion to Impose the Automatic Stay, requesting permission from the Court to protect their assets. Motions to Continue or Impose the Stay both require reasons why the Debtor is filing a repeat case and to prove up that there is no bad faith in the second or third filing. Should the Bankruptcy Judge believe that the repeat filing is simply an effort to hinder creditors from collection activity without the intent of actually completing a bankruptcy, the automatic stay will be denied and in some circumstances the discharge of the debts can be denied.
If you are in need of an emergency bankruptcy filing, please contact Bereliani Law Firm as soon as possible so that we can help you file properly and efficiently.