16 Aug Don’t Abuse Emergency Bankruptcy Filing Process
Last year on this blog, my colleague Pam Stewart wrote a post that explains the emergency bankruptcy filing process. As Pam notes, situations do arise in which an individual needs to file bankruptcy immediately but does not have time to gather all of the documentation needed for a complete filing. An emergency filing allows a debtor to obtain a case number (and thus protection from the automatic stay) by filing only the first two pages of the petition along with a mailing matrix. The debtor then has 15 days to file the remaining 40+ pages of his petition.
The need for an emergency filing may arise if there is a looming foreclosure and the mortgage company decided after three weeks of review that you, in fact, do not qualify for their special, secret loan modification program. I have also filed emergency cases to stop a pending wage garnishment or threatened reposession.
As Pam notes, the credit counseling requirement remains even if you file an emergency, two page petition.
In my practice, however, I have become more and more reluctant to file a “2 page” emergency filing. It has been my experience that once the case has been filed and the case number obtained, it becomes more difficult to obtain the necessary paperwork from my clients.
I find myself chasing my clients to obtain the information I need and often scrambling at the last minute to actually get the paperwork filed. In this type of situation I sense that my client comes to see me as a problem to be dealt with as opposed to a part of the solution.
More importantly, there is a very real downside if my client does not provide me with the documentation needed to complete his petition.
If the remaining paperwork needed to complete the petition is not submitted within 15 days from the date of filing, your case will likely be dismissed administratively. Sometimes this dismissal happens shortly after the 15 day time period ends and sometimes it happens at confirmation (which may be three months after filing). Either way, you will find it much more difficult to refile your case if the need to do so arises.
Under the current law, the automatic stay of bankruptcy will last only 30 days in a 2nd case filed within 1 year of a first case. If you want the stay to remain in force you have to file a motion and appear before a judge to argue that circumstances have changed and that there is good cause to continue the automatic stay protection.
As you might imagine it is much more difficult to argue to keep the stay in force if you made no effort to complete the paperwork in your first case. The 2005 changes to the law are called the BAPCPA amendments – BAPCPA stands for “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.” While there is very little in the way of consumer protection in this law, there are a number of provisions designed to ferret out abuse. And multiple filings by the same person to frustrate the efforts of creditors are perceived as abuse.
So, if you do find yourself needing to pursue emergency bankruptcy relief, don’t see the filing as a reason to relax until you have provided all of the documentation to your lawyer to complete your case filing.
by Jonathan Ginsberg, Atlanta bankruptcy attorney
Jonathan Ginsberg, Esq.
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