Often people will delay their bankruptcy filing. They aren’t sure if they should file, they don’t want to file, they don’t know how to file, or don’t have the money to hire an attorney to file. Delay in the debt collection world usually means things get progressively worse. The longer a debt is outstanding the higher the chance that the creditor will file a lawsuit, garnish wages, bank accounts, or take property.
Often people come to me after they receive notice of a wage garnishment or a possible foreclosure sale on their home and want to file bankruptcy very quickly. People want this because they know that as soon as we file your bankruptcy case the bankruptcy court will issue an order that will stop the garnishment, foreclosure, etc.
It is possible to file a bankruptcy case on the same day that you meet with your lawyer. The question is, is it advisable to do so? And as with most legal questions the answer is “it depends”.
What is Needed to File an Emergency Bankruptcy?
The documents that are filed in your bankruptcy are lengthy. The typical chapter 7 or chapter 13 bankruptcy case is about 45-60 pages long. You are required to disclose all kinds of information on debts, assets, income, expenses, and financial transactions. But to get your case filed – and most importantly to get that protective order that stops the collection efforts of your creditors – you need only do three things.
First, you must complete the bankruptcy petition. Generally the information you need to provide for this two page document is your name, address, social security number and then you are off to the races. Second, you must complete an approved credit counseling course. At my office this course is completed online and takes about an hour.
Finally, you must pay your legal fees. In a chapter 7 bankruptcy you will likely be required to pay the full legal fee and any filing fees the court charges before your case is filed. In a chapter 13 bankruptcy you will likely need to pay a portion (if not all) of your legal fees prior to filing.
While there is a lot of information that will need to be submitted, if you take these three steps your case can be filed and the collection efforts stopped. All of this can be done within two hours.
Should You File an Emergency Bankruptcy?
Now for the really important question. You can file your bankruptcy quickly, but should you? There are risks in filing an emergency bankruptcy case. Specifically, there is a large amount of detailed information that your bankruptcy lawyer will need in preparing your documents. Depending on the specifics of your situation you may or may not qualify for bankruptcy or you may run the risk of losing certain unprotected assets. There must be sufficient time for your lawyer to evaluate your information on debts, assets, and financial transactions in order to be able to properly advise you. If this step is skipped, or delayed, you run the risk of problems arising down the road in your case.
Sometimes the emergency filing is totally necessary. However, in many – if not most – cases a little planning can help you avoid the mad dash to the courthouse. If you have been sued, see a bankruptcy attorney early on in the process to determine if you should file. If you are behind on your house payment, talk to a lawyer and know your options in the beginning and what will be needed in case you need to pull the trigger and file bankruptcy.
A well planned bankruptcy will almost always be a smoother process for you and your lawyer. But if you need speed, bankruptcy can be done more quickly than you might think.