Filing for Chapter 7 bankruptcy can provide you with relief from creditor collection actions, but it takes time. You have to complete and file a multi-page petition, attend the 341 meeting (Meeting of Creditors), and more. But what if you can’t wait that long? What if you’re facing a wage garnishment, repossession, foreclosure, or other collection action that you must respond to immediately? In such a case, you may be able to file an “emergency bankruptcy.”
Emergency bankruptcy grants you an immediate automatic stay. The required filing forms are:
- The voluntary bankruptcy petition, which contains information about which chapter you’re filing as well as your personal details (Form 1)
- A statement about your Social Security number (Form B121)
- The creditor mailing matrix with the names and addresses of the creditors who will appear in the bankruptcy schedules.
- A certificate confirming completion of the credit counseling course OR a request for a waiver
Some courts require additional documents: check the website for your local court or call the court clerk.
The Chapter 7 means test
You must pass the means test to be approved for a Chapter 7 filing. The test, which is intended to keep those who can repay some of their debts from dodging that responsibility, determines whether your income is higher than the state median income for your household size. If you make less, you automatically pass the test.
If you make more, you may still be eligible for Chapter 7 protection: calculate your monthly income over the previous six months, divide the total by six, and deduct approved monthly expenses to arrive at a monthly disposable income amount. If it exceeds an approved amount, you cannot file for Chapter 7 and must file for Chapter 13 instead.
All bankruptcy filers must complete a court-approved credit counseling program prior to filing unless they are exempt due to an approved reason such as disability or being in an active combat zone. In most cases, you can complete the course over the phone or online and receive your certificate quickly.
Once you assemble everything, file the originals and the necessary number of copies with the court clerk. (Be sure to keep copies for your records.) You will also have to pay the filing fee of $335: if you genuinely cannot afford to do so, file an Application to Pay Filing Fee in Installments or an Application to Waive Filing Fee, which may only be done if you:
- Make less than 150% of the official poverty line income applicable to a family the same size as yours
- Are unable to pay the fee, even in installments
You must submit the rest of the necessary bankruptcy documents within 14 days or your case will be dismissed.
If you need to make an emergency bankruptcy filing, a New York bankruptcy attorney can provide you with the required guidance. Once the automatic stay is in effect, you can file the rest of the documentation and work your way toward a better financial future.
Jayson Lutzky is a Bronx, NY personal bankruptcy attorney. Bankruptcy has offered a fresh financial start for many people. If you are in debt, then contact Jayson Lutzky, P.C. You may reach his office at 718-329-9500. Mr. Lutzky offers free in-office initial consultations to prospective clients. He will help you determine if bankruptcy is your best option.