An emergency bankruptcy filing is often the last resort of people who wait too long to seek protection. You’d end up having to file one if you are facing immediate foreclosure, eviction, wage garnishment, or repossession.
When an attorney files an emergency bankruptcy petition for you they’ll file what’s called a “skeletal petition.” This is just what it sounds like: a very scant petition which includes the bare minimum of the information you’d need to launch an automatic stay.
Just how long can you procrastinate on a bankruptcy filing before you create serious problems for yourself? In truth, not as long as you think. Emergency bankruptcy petitions can create some real issues.
First, once it’s filed you’ll have fourteen days to get the full bankruptcy packet completed and submitted. That’s not a very long time. You’ll have to scramble to gather all your financial information. Keep in mind mistakes can be very costly. Some mistakes may even get you into real trouble, as they may look a lot like bankruptcy fraud, whether you meant to defraud anyone or not.
Fail to get all that paperwork in on time, and you could watch your case get dismissed. It’s harder to file again after a dismissal.
An “emergency” bankruptcy filing can be a bad idea for another reason as well. For the most part, filing for bankruptcy takes some preparation. There are things you should stop doing about six months prior to your filing: namely, you should stop taking out new debt or making new, large purchases.
If you’re scrambling to get the job done at the last minute it’s possible you’ve already made a mistake that would have made waiting to file a better idea.
Burying your head in the sand is never a good idea. You should consider doing it the moment you get behind on a major payment attached to property you might lose.
In fact, you’re essentially in “pre-foreclosure” the first time you miss a house payment. By the time you’ve collected two or three delinquent payment letters, real trouble is on the horizon.
If you see a “Breach Letter” informing you that you’ve defaulted on your loan agreement time is truly running out. And if you see a Notice of Intent to Foreclose you’ve got 30 days before the foreclosure suit goes to court.
You should also be wary if you’ve received correspondence from any of these foreclosure law firms.
See the full Pennsylvania foreclosure process here.
New Jersey homeowners would also receive a Notice of Intent to foreclose.
We help homeowners save their homes all the time, but we’d be the first to tell you having more lead time is a good thing.
It’s also a good idea to file if you’re suffering from any of the other major signs you need to start considering bankruptcy.
If you do find yourself having to file an emergency petition, make very sure you use a lawyer with plenty of experience. That experience can make a huge difference in your filing. An experienced attorney can help you navigate past all the pitfalls of an emergency bankruptcy.
Bottom line, don’t wait. An emergency bankruptcy petition may be an option, but it’s not a good one.