Tuscaloosa Emergency Bankruptcy Lawyer
Filing for bankruptcy is a major financial decision that should be thought out carefully. A bankruptcy petition comes with lots of benefits – such as debt relief – but it also comes with a few downsides, such as impacting your credit for years to come. But some people aren’t just facing the unbearable stress of debt, they’re also facing creditor harassment, home foreclosure, eviction, vehicle repossession, wage garnishment, and collection lawsuits. These are financial emergencies that may push someone to file an emergency bankruptcy. If you’re in this impossible situation, the Tuscaloosa bankruptcy attorneys at Eric Wilson Law can help.
Eric Wilson Law is a debt relief agency that has extensive knowledge of bankruptcy law. If you’re at risk of losing your home, car, and all of the money in your pockets, it’s okay to reach out for professional help. We can help you achieve financial security either through a bankruptcy filing or some other debt relief method. Call our law firm at 205-349-1280 to schedule a free consultation.
What is Emergency Bankruptcy?
An emergency bankruptcy petition, sometimes called a “skeleton bankruptcy,” is basically a regular bankruptcy petition but with far less paperwork. The goal with an emergency filing is to obtain the benefits of an automatic stay with the minimum amount of paperwork required by the bankruptcy code. That way, people who are really in a bind can get quick relief from debt collection efforts.
An emergency bankruptcy filing doesn’t mean that you just never fill out all the required forms for a bankruptcy case, though. You will have to fill out all the remaining bankruptcy forms within 14 days of your filing date. The main difference between an emergency bankruptcy filing and a regular bankruptcy filing is that you fill out far less paperwork in the beginning in order to obtain the benefits of the automatic stay.
What is an Automatic Stay?
If you’re new to the world of bankruptcy, an automatic stay is basically a legal provision that temporarily stops all debt collection efforts. In other words, this provision will prevent debt collectors from harassing you, garnishing your wages, foreclosing on your house, or repossessing your vehicle. The automatic stay happens immediately following a bankruptcy filing, even before you’ve completed all the remaining paperwork.
Common Reasons Why People File for Emergency Bankruptcy
The main reason why anyone files for bankruptcy is because they have an unmanageable amount of debt. But people tend to file an emergency bankruptcy petition for a variety of other reasons too. The main reasons why people go through with an emergency filing is to prevent:
- Home foreclosure sale
- Vehicle repossession
- Wage garnishment or bank garnishment
- Collection lawsuits filed by creditors
Pros and Cons of Filing an Emergency Bankruptcy
Filing an emergency bankruptcy may sound like a quick and easy fix to your emergency financial problems, but it’s something that requires a lot of thought and professional advice before pursuing. Below, our legal team lays out some basic pros and cons to emergency filings that may help you figure out the best course of action.
- You will obtain the benefits of an automatic stay immediately upon filing for bankruptcy. This means you may have temporary relief from foreclosure, repossession, wage garnishment, eviction, and more.
- There is much less paperwork required to get your bankruptcy petition moving.
- If all goes well with your case, you may obtain debt relief in as little as 90 days (for Chapter 7 Bankruptcy) or 3 to 5 years (for Chapter 13 bankruptcy).
- Just because you don’t initially have to fill out all the required bankruptcy forms, doesn’t mean you won’t ever have to. Once your petition gets moving, you will have to fill out the remaining bankruptcy forms within 14 days of your skeleton filing. There are upwards of 50 forms that need to be filled out for any bankruptcy case. All of them are complex and require a lot of financial information (tax returns, paycheck stubs, assets, bank statements, etc.) If you fail to fill out the remaining paperwork within 14 days, your emergency petition will be dismissed, and you will be back where you started.
- Because a skeleton bankruptcy filing is meant to move fast, you and your bankruptcy attorney may not have as much time to foresee roadblocks in the filing process. When you do run into problems, you will have much less time to figure it out. For example, you may discover that you have property that’s not covered by specific Alabama exemptions.
- At the end of the day, an emergency petition may only provide temporary relief from your debts and creditors. For example, if you’re behind on car payments and you’re facing repossession, you will have to make the payments current if you file an emergency Chapter 7 petition. If you’re behind on rent and you’re trying to avoid eviction, you also have to bring your payments current, no matter if you file Chapter 7 or Chapter 13. Many people don’t have the means to do this.
How to File an Emergency Bankruptcy Petition
In order to file an emergency bankruptcy petition, you must fill out all the bankruptcy forms listed below.
- Voluntary Petition (Form 101): This primary document is 8 pages long and asks for your basic information such as your name, your address, your job, which district you’re filing in, which chapter of bankruptcy you would like to file, whether you’ve filed for bankruptcy before, and more.
- Social Security Number Statement (Form 121): This form is only 1 page long, and it asks for your full social security number. The information on this form will not be available to the public.
- Creditor Matrix: This is basically a creditor mailing list. You must include all of your creditors in alphabetical order so that they are aware of your skeleton filing and your automatic stay. The creditor matrix also notifies your creditors of other steps in the bankruptcy process, such as the 341 meeting of creditors.
- Credit Counseling Certificate: Lastly, you will need proof that you completed some sort of credit counseling class. All bankruptcy filers need to complete this class so that they can have the tools they need to live a debt free life after bankruptcy.
Tuscaloosa bankruptcy attorney Eric Wilson can help you gather and fill out the necessary emergency bankruptcy forms. Additionally, he will help you fill out all the other required forms before the 14 day deadline.
The Filing Fee
When you file bankruptcy you must pay a filing fee, even for an emergency petition. The filing fee will vary depending on what chapter of bankruptcy you choose to file.
In Alabama, Chapter 7 filers will have to pay a fee of $338 to the bankruptcy court clerk while Chapter 13 filers will have to pay a fee of $313.
However, many emergency bankruptcy filers may not be able to afford a filing fee, especially if they can’t currently afford their rent or car payments. In cases like this, filers can pay their fee through installments. If paying your fee in installments would work better for your current financial situation, then you need to fill out this form.
Unfortunately, some people can’t afford to pay the bankruptcy filing fee at all. If this is the case for you, you may be able to fill out a fee waiver application and give it to your local bankruptcy court. In order to qualify to get your fee waived, your total monthly income must fall below the federal poverty threshold. So if you’re making less than $1,698 on a monthly basis for a 1 person household, you may be able to fill out a fee waiver application and avoid paying for bankruptcy entirely.
Do I Need to Tell My Creditors About My Emergency Bankruptcy Filing?
Yes, it’s always a good idea to notify your creditors of your bankruptcy case even though you did fill out a creditor matrix form during the filing process. If you’re facing an impending foreclosure, eviction, or repossession, you need to let them know as soon as possible that you filed bankruptcy and that there is an automatic stay in place. If you don’t, it will take them several days to receive a notification through your creditor mailing list.
Before you call anyone, be sure to consult with Tuscaloosa bankruptcy lawyer Eric Wilson. He will help you say the right thing so that you don’t find yourself in further trouble.
Chapter 7 vs. Chapter 13 Bankruptcy
Before following through with an emergency bankruptcy filing, it’s also important to know which chapter of bankruptcy will be best for you and your financial situation. Below, our law firm will give you a basic breakdown of the two most common chapters of bankruptcy. However, it’s crucial to speak with an experienced bankruptcy attorney like Eric Wilson before making any decisions. He will carefully review your financial situation and help you determine which chapter of bankruptcy you need to file to receive relief.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the most common type of bankruptcy that people file. Basically, you will have to sell some of your most valuable assets in order to pay off your debt. You won’t have to sell all of your valuable possessions though. That’s because some will be protected by statewide exemptions.
If all goes well, you could receive a bankruptcy discharge within 90 days. Chapter 7 can wipe out the majority of your debts. The only types of debts that Chapter 7 won’t wipe out are some tax debts, child support payments, alimony payments, student loans, and “non-dischargeable” debts.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is the second most common chapter of bankruptcy that people file. Instead of selling your assets, you will follow a 3 to 5 year repayment plan. If you stick to these monthly payments, you could become completely debt free in a few years.
Call a Tuscaloosa Emergency Bankruptcy Lawyer at Eric Wilson Law Today
If you’re currently facing some kind of financial crisis due to your unmanageable debt – such as potentially losing your car or your home – you need to speak with an experienced bankruptcy attorney as soon as possible. Eric Wilson will review your financial situation and help you determine if an emergency bankruptcy filing is truly the best option for you. If it is, he will walk you through the entire bankruptcy process until you’re debt free. Call our law firm today at 205-349-1280 to start an attorney client relationship with us. We offer a free consultation to all new clients.