An emergency bankruptcy is a fast way to stop a foreclosure, eviction, or repossession. It can also halt an impending wage garnishment in its tracks, stop a bank levy, stop a personal property seizure, or stop a debt collection lawsuit.

While ideally you would have filed long before the matter became urgent, sometimes it takes time to come up with the court fees. Thus, this streamlined process can be used to activate the automatic stay by preparing a “skeleton” petition.

A normal petition contains a great deal of financial information. A skeleton petition contains basic information, but will still need to contain the names and contact information for every creditor you owe money to. 

You will still have to complete your credit counseling course prior to filing your skeleton petition. This is easy and can be taken care of online, so long as the course is certified to provide the required training. You can find a list of agencies approved by the United States Department of Justice at this link.

After the Skeletal Petition

Once you’ve filed the emergency petition, you’ll need to file the additional documents within 14 days or else risk dismissal. Since dismissal can impact automatic stay provisions in the future it is absolutely vital to make the remaining paperwork Priority 1 until it’s all filed.

Mistakes can cost you, so do your best to be thorough and accurate. The time crunch on getting all of your financial paperwork together is perhaps one of the biggest disadvantages of waiting until the last minute.

The second disadvantage is that you may have made mistakes in the months leading up to the bankruptcy. For most people there is a six-month prep period during which they need to stop making certain financial moves, such as using credit for luxuries, or making big property transfers. 

Avoiding Emergency Bankruptcy

Most Orange County residents will want to avoid the emergency process in favor of filing their bankruptcies the slow and steady way. You can do this by understanding the financial “warning signs” which can tell you a bankruptcy could be an impending need.

These signs include:

• Missing house or car payments. It only takes one missed payment for you to breach your contract. The foreclosure process essentially starts then and there, even though there are a few intervening steps.
• You routinely use credit cards to pay for necessities, like food or utilities.
• You’re only making the minimum payments on your credit cards, and it’s been that way for months.
• Many of your accounts have gone to collections, and creditor harassment has become routine.
• Your credit cards are maxed out.
• You’ve undergone a major life change like disability, job loss, or divorce. Many of these events create financial difficulties from which it can be difficult, if not impossible, to recover from.
• You’re using predatory loan products like payday loans, car title loans, or high-interest personal loans just to survive.

The sooner you recognize these warning signs and file, the smoother the filing process will go. 

Want to get started? Contact Haysom Law for a free consultation. Your consultation is risk-free and will help you determine if bankruptcy is the right answer in your unique circumstances.

See also:

Protecting Your Goshen, NY Home in Bankruptcy

How to Respond to an Orange County, NY Debt Lawsuit

Why is Credit Counseling Required for an NY Bankruptcy?