One of the most powerful provisions of the federal bankruptcy law is known as the “automatic stay.” When a bankruptcy case is filed, the court issues an automatic stay injunction which stops all collection action against the debtor, including repossessions, evictions, garnishments, and foreclosures. In cases when the debtor needs this relief immediately, an emergency bankruptcy petition may be the answer to quickly stop collection actions.
An emergency bankruptcy petition is a three page petition with a list of the creditors. These papers are filed with the bankruptcy court along with the necessary fee. The automatic stay goes into effect immediately and stops all creditor collections. Any creditor who violates the court’s automatic stay order could face serious legal penalties. After the emergency bankruptcy petition is filed with the bankruptcy court, the debtor has 14 days to file the completed bankruptcy paperwork, including all schedules. If the completed bankruptcy petition is not filed with the bankruptcy court within 14 days after the emergency bankruptcy filing, the bankruptcy case could be dismissed.
As a practical matter, your creditors will receive notice of your bankruptcy filing by mail from the bankruptcy court. This may take several days, so you or your bankruptcy attorney may need to provide notice of the bankruptcy filing to stop a pending collection action.
Along with the emergency petition the debtor must provide evidence that he or she has attended the mandatory credit counseling before filing the bankruptcy case. Failure to satisfy the credit counseling requirement will result in dismissal of the bankruptcy case and loss of the automatic stay protection.
If you are struggling with a serious collection action and need immediate relief, an emergency bankruptcy petition may be the answer. Contact an experienced bankruptcy attorney and discuss your situation to determine whether the emergency bankruptcy petition is right for you.