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This video is not intended to form a client lawyer relationship and is only intended to provide background information about filing an emergency bankruptcy petition and its effects. If you need legal advice, contact a lawyer. Everyone’s situation is unique and going to the internet for advice is not recommended.
Intro – My name is Derek Soltis. I am an attorney with the Law Offices of Patel Sotlis Cardenas and Bost. Right now the disclaimers are appearing on the screen and I will shortly get into the Nuts and Bolts of filing an Emergency Bankruptcy. I have had 2 calls this week from people related to this, so other people are probably asking the same question.
Warning Bankruptcy Can Have both Short Term and Long Term Financial Repercussions and subject you to Prosecution if you file a fraudulent Bankruptcy petition. You may also face loss of assets if you file the wrong type of petition and do not exempt your assets. As an example, if you own a home and file a chapter 7 bankruptcy, and your homestead exemption is not enough to cover your equity. A Chapter 7 trustee could try to sell your home out from under you, or if you have a law suit that is about to settle, or are about to receive an inheritance. This money could be taken from you in order to satisfy your debts to your creditors.
For all of the Do IT yourselfers. I get this question a lot.
Do I need an Attorney to file bankruptcy?
No, you do not need an attorney to file bankruptcy. You also don’t need a dentist to work on your teeth or a car mechanic to fix your car. However, if you hire someone that does that type of work on a daily basis, you are likely to get better results than doing it yourself. So, using an attorney is not needed to file bankruptcy, but it is highly recommended. 98%+ of chapter 7 cases filed by lawyers complete successfully, while roughly 60% of Pro Se filings (Filed With out an attorney) complete successfully. Chapter 13 is a different animal where only 1/3 of cases in general complete successfully.
Bankruptcies contain numerous forms that most people need help with filling them out. If you are a DIY kind of person, below is a link to the instructions on how to file a bankruptcy and it can be found in the description of the video. https://www.uscourts.gov/sites/default/files/instructions_individuals.pdf You can also click on the card that is being displayed now to go to a video on how to file bankruptcy for free or at a low cost. I will include the link again at the end of the video.
To get a successful bankruptcy discharge bankruptcy laws require you to fully, accurately, and honestly disclose all of your assets, debts, income, and expenses. Basically, any financial information about you will be disclosed to the Bankruptcy Trustee for your case. If you attempt fraud or to abuse the bankruptcy system you will get into trouble.
What are Emergency Circumstances when Bankruptcy can help?
An emergency bankruptcy can:
- Stop the sale of your home through foreclosure or stop a final judgment in a Tax Lien foreclosure
- Stop an Eviction (At least temporarily, or permanently if you can repay the back rent in chapter 13.) (If you are a landlord that has had a tenant file bankruptcy, in many cases, you can file a motion to have the automatic stay lifted.)
- Recover a vehicle that was repossessed
- Stop Garnishments and Levies on bank accounts, and
- Stop lawsuits from continuing.
It is rarely a good idea to file an emergency bankruptcy if you can avoid it. However, sometimes the choices are limited as to the people that need to file. Once an emergency bankruptcy is filed, the debtor has 14 days to get in the rest of the documents. And, if that is not enough time, an extension can be asked for to get additional time. This type of extension is not always granted, and many people use bankruptcy as a temporary reprieve from their issues. This is where people can into trouble for bankruptcy fraud if they are attempting to abuse the bankruptcy system.
The 14-day deadline is not the only deadline. If you file bankruptcy without fully filling out the forms or make simple mistakes, this could cause you difficulty later, including the dismissal of your case or a denial of your bankruptcy discharge. There are even criminal penalties if the court finds you were intentionally evasive or less-than-truthful in your statements and paperwork.
How an Emergency Bankruptcy Helps.
When you file for any chapter of bankruptcy, the “automatic stay” goes into place. The automatic stay is an order that prevents creditors from moving forward with collection actions against you. This includes court actions, evictions, garnishments, repossessions, collection calls, letters, and so on.
The stay is temporary under a chapter 7. Creditors can also ask for the automatic stay to be lifted in a chapter 7 or chapter 13 if they have valid reasons. Chapter 7 bankruptcy and eviction the motion to lift the automatic stay is almost always granted. When it comes to foreclosure, tax liens, repossessions chapter 7 is a temporary fix, however debts are normally eliminated and in the case of eviction both back rent and forward rent are discharged if you are no longer living in the property.
In Chapter 13, you can catch up on the delinquent mortgage, and car payments if you can afford it. And sometimes rent based on your state’s law saying whether you can cure or not. So, you might be able to fix an eviction and not just delay it if you can bring your payments current and maintain payments going forward.
Filing Requirements for an Emergency Petition
At my firm an average bankruptcy filing is about 40 to 70 pages and in some cases even more. The list of documents will contain all of your creditors, assets, debts, income, expenses, and detailed statements concerning your financial history. So you may not be able to figure out all of the forms to file an emergency petition.
3 Minimum Steps Required to File an Emergency Bankruptcy Petition:
- Take the Credit Counseling Course. (This is roughly a one hour class that can be taken online or by phone.) Below is the link to the list of federally approved course givers. https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111 There are also courses in languages other than English.
- Fill out the minimum forms required to be filed for a Skeleton Petition:
- The bankruptcy petition. The first document includes identifying information and tells the court which bankruptcy chapter you intend to file.
- Creditor matrix or mailing list. You’ll include a list of the names and addresses of all your known creditors. This includes collection agencies and any attorneys or courts you have open lawsuits. Anyone that you think should be notified of your bankruptcy should be included.
- Statement of Social Security Number. You’ll provide your full Social Security number on a separate form that the court will not make public. All of the other forms only have your last 4 digits of your social security number listed.
- Certificate of credit counseling. You’re required to receive credit counseling during the 180 days before filing. See step 1.
- There may be other local forms you need to file, if you have questions talk to the bankruptcy court or call a bankruptcy attorney near you. (NY has 4 separate districts and not all of the local requirements are the same.)
- Pay the Filing Fee, request to pay in instalments or ask for the fee to be waived. At the time of filing your bankruptcy petition you must eit
- her pay the filing fee or request an alternative fee schedule. If you don’t qualify for a fee waiver, or if you need more time to pay, you can pay the fee in up to four installments. Be aware that most courts require payment of the fee in full when filing a Chapter 13 bankruptcy.
The court will mail notifications to the creditors you listed on your petition, however you may find it necessary to personally notify your creditors. For instance, if your home is going up for auction tomorrow related to the foreclosure, you will want to notify the sheriff/referee and the attorney for the lender. It is easier to make the notifications, then having to unwind the actions later. The same goes for wage garnishments, lawsuits, and repossessions. Even include the court in which you filed for notification. Make sure you include your bankruptcy case number, and the filing date, and the court case index number for whatever other legal action is pending against you.
- Filing the Remaining Bankruptcy Forms
You must file the remaining paperwork within the next 14 days, including all schedules and required forms. If you don’t file within the period, the court will dismiss the bankruptcy case. You normally can file again immediately, however, you do not get the full automatic stay again, and if you appear to be abusing the bankruptcy system you may be barred from filing again.