Emergency Bankruptcy And The Automatic Stay

Posted on: 14 August 2017

Chapter 7 bankruptcies are not only a major decision, but the stack of paperwork required to file can be a bit intimidating. There are reams of forms to be filled out, and it can be incredibly challenging to focus when you are in danger of losing property and are being harassed by bill collectors. There is a solution to this paperwork nightmare, however, and it will get you some quick and much-needed financial relief. Read on to learn more about what it takes to complete an emergency bankruptcy.

What will an emergency bankruptcy filing do for you?

A chapter 7 bankruptcy filing, emergency or otherwise, triggers a quick and powerful legal action that applies to your creditors: the automatic stay. This action takes effect immediately, and all collection activity must come to a stop. When you consider what collection activity comprises, you should understand that the automatic stop applies to foreclosure, some evictions, vehicle repossessions, utility shut off actions and all phone calls and correspondence in connection with any money owned.

What it won't do for you.

Unfortunately, the power of the automatic stay has a few notable exceptions, such as student loan debt collections, child support back payments and your tax obligation. There may be alternate methods available to deal with these categories of debts, such as offers in compromise and installment plans, so speak to your bankruptcy attorney for more information .

The emergency bankruptcy paperwork package.

There are a few must-haves when filing this abbreviated package:

  1. The matrix. Not a movie, but a listing of all of your creditors and how much you owe them.
  2. Form B-1, which is just the first 3 pages of your bankruptcy petition.
  3. Form B-21, which is a Social Security number document.
  4. Proof of credit counseling. Exhibit D is a fairly new requirement that shows your participation in a credit counseling class. If you have not had time to do it and can prove the need for immediate relief, you may be able to put off this requirement for a bit. For example, if your home is foreclosed on immediately, you may get an extension on Exhibit D.

Finishing up.

While you may get some immediate relief with this shortened version, you still must file the complete package within 14 days, or risk having your bankruptcy dismissed. Speak to your bankruptcy attorney for more information about this quick and effective manner of dealing with the loss of property due to financial issues.