What is an Emergency Bankruptcy Filing?

Meet Jane. Jane has some old credit card debt and medical bills. She was recently sued by one of her creditors. She’s been researching bankruptcy online but hasn’t filed a case. Jane goes into work and learns that the creditor that sued her has a judgment and is garnishing her wages, starting with her next check. The wage garnishment would leave her unable to pay her other bills.

Jane must file bankruptcy right away to prevent her next check from being garnished. So Jane files an emergency bankruptcy. This article covers what’s in an emergency filing, when and why they’re sometimes necessary, what’s required to file an emergency case, and what you can expect if you file an emergency bankruptcy.

What Is an Emergency Bankruptcy Filing?

An emergency bankruptcy filing is a bankruptcy case that’s filed with just some of the required bankruptcy forms. Depending on where you live, an emergency filing might also be called a barebones filing, a skeleton bankruptcy, or an incomplete filing. An emergency bankruptcy petition includes the bare minimum information required under the Bankruptcy Code to invoke the automatic stay’s protection. 

The automatic stay takes effect immediately when your bankruptcy case is filed, even in emergency cases. The automatic stay orders all your creditors to stop any collection efforts against you. An emergency petition allows the automatic stay to take effect even before you’ve completed all your bankruptcy forms.

Even though you can file an emergency case before completing all the bankruptcy forms, an emergency bankruptcy filing doesn’t excuse you from submitting all the same paperwork that’s required in every other bankruptcy case. By law, you must file all the other forms within 14 days after your emergency filing. Otherwise, your case will be dismissed, and your creditors can resume collection efforts.

Why Do People File Emergency Bankruptcy Cases?

Like Jane in the example above, most people who file emergency bankruptcy cases do so to prevent an impending collection action. Many people spend some time researching and deliberating before deciding to file bankruptcy. Even after you’ve decided to file, it can still take some time to collect all the necessary documents and fill out all the required forms. 

The automatic stay can stop further collection efforts, but it can’t undo actions that have already happened. That’s why it’s critical that the automatic stay takes effect before a wage garnishment, repossession, bank levy, or foreclosure occurs. If you don’t have enough time to put all your paperwork together before a major collection event, an emergency bankruptcy filing shields you from your creditors while you finish filling out your bankruptcy forms.

What Do I Need for an Emergency Filing?

The paperwork required for an emergency bankruptcy filing is only a fraction of what you’ll need to submit for your bankruptcy filing to be complete. Still, even for an emergency filing, you must meet some minimum requirements.

Choose the Right Kind of Bankruptcy

Most people file bankruptcy either under Chapter 7 or Chapter 13 of the Bankruptcy Code. These two kinds of bankruptcy work very differently and were designed for different purposes. Debtors primarily use Chapter 7 to eliminate unsecured debts, such as credit cards and medical bills. To keep your house or car in Chapter 7, you must be current on the payments. 

Emergency bankruptcy filings are often used to stop repossessions or foreclosures. In these situations, Chapter 13 bankruptcy usually makes more sense. Debtors who are behind on car payments, mortgage payments, or even rent payments typically use the Chapter 13 repayment plan to bring these payments current. 

When you file an emergency case, you must designate which kind of bankruptcy you’re filing. If you choose the wrong type of case, it’s not always easy to change to a different chapter. If you’re not sure which chapter to file, try to meet with an experienced bankruptcy lawyer. Be sure to explain that you’re in an emergency situation when you schedule the consultation.

Make Sure You Qualify

Not everyone is eligible to file a Chapter 7 bankruptcy. You’ll have to pass a means test to see if you qualify for Chapter 7 relief. You’re not required to submit the means test forms as part of an emergency filing, but it’s still a good idea to complete the means test calculations before you file, in case there’s an issue with your Chapter 7 eligibility.

If you’ve filed for bankruptcy before, you should also check to see if you qualify for a bankruptcy discharge. The Bankruptcy Code requires certain waiting times between a prior bankruptcy discharge and a new discharge. These wait times are different based on which chapter you filed before and which chapter you’re filing now. The wait times only apply if you got a discharge in your previous case. Even if you can’t get a discharge due to a previous case, you can still use a Chapter 13 plan to catch up on payments.

There are also some limitations on the automatic stay that could apply if you’ve filed bankruptcy before. Ordinarily, the automatic stay begins when a bankruptcy case is filed and continues until the case is dismissed or discharged. If you filed a previous bankruptcy within the past year, and that bankruptcy was dismissed (not discharged), then the automatic stay in the new case will only last for 30 days. You can file a motion to extend the automatic stay beyond 30 days. The motion must usually be filed with your emergency paperwork.

If you’ve filed two or more bankruptcies within the past year, the automatic stay won’t take effect when you file your case. You can file a motion to impose the stay, but you’ll have to wait for a hearing and an order. Without the automatic stay, filing an emergency bankruptcy won’t protect you from ongoing collection actions.

Take a Credit Counseling Course

Everyone who files bankruptcy must first complete a credit counseling course from an approved provider. This includes emergency bankruptcy filings. Most providers offer the course online, by phone, or both. The fee varies by provider but is often between $10 and $45. The course is a one-time session that usually takes less than two hours. When you complete the course, the provider will email you a certificate. You must file this certificate with the court when you file your emergency forms.

Complete the Minimum Required Forms

To file an emergency bankruptcy, you must complete and submit at least the following:

• Voluntary Petition (Form 101): This eight-page form includes basic information about you, where you live, which kind of bankruptcy you’re filing, and your previous bankruptcies, if any.

• Statement of Social Security Number (Form 121): This is the only place in your paperwork where you’ll use your full Social Security number. Only the court can see it; it’s blocked from creditors, lawyers, and even your trustee.

• Creditor matrix: This is an alphabetical list of all your creditors and their mailing addresses. Most bankruptcy courts require you to submit the matrix in a particular format. In some courts, you must submit a verification form along with the list of creditors. Check with the court where you’ll file your case to be sure of the requirements.

• A certificate of credit counseling.

You can download Form 101, Form 121, and the remaining bankruptcy forms on the U.S. Courts website. The site has an official instruction guide to help you complete the forms. You can also use Upsolve’s form guide for help.

Get Your Filing Fee

The bankruptcy court charges a filing fee of $338 for Chapter 7 cases and $313 for Chapter 13 cases. The fee is due when you file your case. If you can’t afford to pay the full filing fee, you can file a motion asking the court to let you pay the fee in installments. Most courts require you to pay a minimum first installment when you file your emergency case. Check with your court to be sure. 

If your income is less than 150% of the federal poverty guidelines, you can ask the court to waive your filing fee. If you’re not paying the fee in full, you must file your motion for installments or a fee waiver when you file your emergency paperwork.

File the Case

Only bankruptcy attorneys can file new cases online. In an emergency case, you should file your paperwork in person, since mailing your forms can cause a delay. You can use the federal court locater to find your bankruptcy court. Some bankruptcy districts have rules about where you can file based on which county you live in. Check your court’s website to confirm the residence rules and office hours. It also helps to find out if your court has other requirements, like bringing certain forms of ID or extra copies of your forms. If in doubt, call the court clerk.

I’ve Filed an Emergency Bankruptcy. Now What?

An emergency bankruptcy filing will bring you some instant relief, but your job isn’t done. You need to notify the creditor that caused you to file the emergency case. You also need to complete and file your remaining bankruptcy forms.

Notify Your Creditor

The bankruptcy court will mail notice of your emergency filing to all the creditors in your creditor matrix. But it can take several days or longer for creditors to receive this notice. To effectively stop a garnishment, lawsuit, foreclosure, repossession, or other collection action, you should call the creditor yourself. If you know the creditor’s attorney, contact the attorney instead of calling the creditor directly. You’ll usually need to tell them your bankruptcy case number, which court you filed in, and the date you filed. Make a note of when you called and who you spoke with in case there’s a problem.

Complete and File Your Remaining Bankruptcy Forms

After you file your emergency paperwork, you only have 14 days to file the rest of the bankruptcy forms. Fourteen days can go by quickly, so don’t put this off. Like the emergency forms, the remaining forms and instructions are available online. Upsolve also has a free filing guide for each state.

Within a few days after filing your emergency case, you’ll receive a deficiency notice from the bankruptcy court. This doesn’t mean there’s something wrong with what you already filed. It just means you haven’t filed all the required forms yet. Your deficiency notice will contain a checklist of the remaining forms you must file and the deadline for filing them. File your remaining forms in person to be sure they’re received by the deadline.

If you don’t file all the remaining bankruptcy forms by the deadline, the court can dismiss your case. A dismissal ends the automatic stay, which means your creditors can proceed with collection actions. If you need more time to file your remaining forms, you can file a motion asking the court for an extension. Courts are often reluctant to grant these extensions, so don’t ask for more time unless you truly need it.

After all your forms have been submitted, your case will proceed just like any other bankruptcy case. You should receive a notice with your trustee’s contact information and the date, time, and place for your meeting of creditors. It’s usually about 30-45 days after your filing date. Your trustee will probably also contact you to request documents, which you’ll need to send at least seven days before the meeting.

What Are the Downsides To Filing an Emergency Bankruptcy?

The biggest drawback to filing an emergency case is having such a limited time to prepare your bankruptcy forms. The forms are complex. You’ll need to gather documents, such as tax returns, bank statements, and paycheck stubs. Another drawback is that, while completing your other forms, you may encounter unexpected issues with your case, such as property that’s not covered by exemptions. If you run into a problem, you don’t have much time to figure out a solution. 

Also, while an emergency bankruptcy provides you some relief, in some situations it’s just a temporary solution. In Chapter 7, for example, if you want to keep your house or car, you must bring the payments current right away. In Chapter 13, you have more time to catch up on your payments. If you filed bankruptcy to stop an eviction, you only have 30 days to bring your payments current, no matter which chapter you file. 

Can Upsolve Help With an Emergency Filing?

Unfortunately, Upsolve can’t help you file an emergency bankruptcy. Upsolve’s software can only generate a complete set of bankruptcy forms. In other words, you must complete all the forms before you can file your case using Upsolve’s app. Also, because of the deadlines and other issues that can arise in emergency cases, representing yourself can be risky. While a lawyer isn’t required to file bankruptcy, your emergency filing is more likely to succeed if you have an experienced bankruptcy attorney.

Let’s Summarize…

In an emergency bankruptcy filing, you file only the minimum required forms with the bankruptcy court. Emergency filings can be helpful when you need to stop an imminent collection threat, such as a repossession, foreclosure, or wage garnishment. In these situations, you may need to file bankruptcy in a hurry, without having time to complete all the forms. The emergency filing activates the automatic stay, which protects you from creditors. But after you file, you only have 14 days to complete all your other paperwork. This can be risky, especially if issues come up in your case. If you don’t submit the remaining forms on time, your case could be dismissed.