Because bankruptcy can immediately stop collection action such as wage garnishments and foreclosure, sometimes it may be necessary to file an emergency bankruptcy petition.
The term emergency bankruptcy petition refers to more than just its urgency. It is actually a special ‘skeleton’ petition used when a debtor needs to file bankruptcy before all of the normal forms can be completed.
By filing the skeleton petition, a debtor can obtain the benefits of the automatic stay and instantly stop most types of collection action.
An emergency filing consists primarily of the bankruptcy petition and a list of creditors. Once this is filed, the debtor may have up to 14 days to file the rest of the documents required.
Instantly Stop Foreclosure and Most Other Collection Action
The most common reason debtors file emergency bankruptcies is to use the automatic stay to stop imminent collection activity.
The automatic stay is the order entered automatically when you file bankruptcy that suspends most creditors from taking collection action against you.
Sometimes there just is not enough time to complete a regular bankruptcy petition when a debtor is facing foreclosure auction, automobile repossession, eviction, or wage garnishments.
Unfortunately, the automatic stay is not absolute or indefinite, especially if the debtor files for bankruptcy under Chapter 7.
Chapter 7 bankruptcy will not cure delinquent mortgage payments or indefinitely postpone foreclosure or eviction. For that, Chapter 13 offers more robust protection to help debtors stay in their homes.
Some creditors are exempt from the automatic stay. One of the best examples is someone to whom spousal maintenance or child support is owed. Domestic support obligations are non-dischargeable and filing bankruptcy, even as an emergency, will not stop collection of those debts.
What to Do After Filing Emergency Bankruptcy
After you file the emergency petition, your main priority should be timely submission of all of the other documents required. If these documents are not filed within 14 days, your bankruptcy petition may be dismissed.
You also should notify your creditors of your emergency filing because the bankruptcy court can take several days to send notice to your creditors.
For debtors who hire a bankruptcy attorney, this process will be much easier. The attorney will provide the notice of your bankruptcy necessary to immediately stop collections to any creditors actively collecting debts.
This is another advantage of hiring an attorney as he or she will be able to ensure that the rest of your bankruptcy paperwork (often between 50 and 100 pages even for relatively simple chapter 7 bankruptcies) is completed correctly and timely filed.
If you have any questions about bankruptcy or need an emergency petition filed, please contact us for a free consultation. For emergency situations outside of normal business hours, you may leave a voicemail or send a text message to 480.808.8488 and one of our attorneys will promptly return your message.