My husband and I have been discussing filing for bankruptcy for some time, but recently we received a notice of foreclosure from our lender. What do we need to do to file an emergency bankruptcy petition to avoid foreclosure and buy us some time?
If your mortgage lender is about to foreclose, filing an emergency bankruptcy petition (also called a bare-bones or skeleton petition) can delay or stop the foreclosure process. It could give you more time to negotiate with the bank.
Keep in mind that while Chapter 7 will stop a foreclosure, it will be temporary. If you'd like to keep your home, Chapter 13 will likely be the better option. Read on to learn more about how to file an emergency bankruptcy petition will stop a foreclosure sale and about important bankruptcy procedures.
When you don’t have time to complete all required bankruptcy forms, you can take advantage of the automatic stay by filing an emergency bankruptcy petition. An emergency petition lets you file for bankruptcy by filling out a few forms and taking a credit counseling course. You then have 14 days to complete the rest of the required paperwork and file it with the court.
Many people want to stop a foreclosure on the eve of bankruptcy. An emergency petition can do just that. If you have more time, it’s a good idea to find out when you’ll need to file your bankruptcy petition.
How quickly a lender can foreclose on your home depends on state law. If you received a foreclosure notice from the bank, you'd want to read it carefully to determine the date of your foreclosure (or trustee) sale. In most states, your lender must give you ample notice of your default and wait a certain statutory period before setting a foreclosure sale date.
The moment you file for bankruptcy relief (including an emergency petition) an automatic stay goes into effect that prohibits your lender from going forward with the foreclosure sale. Bankruptcy can delay or stop the foreclosure process as long as the home hasn’t been sold. But once the lender sells your home, you no longer own it, and bankruptcy can’t help you.
In most cases, you can file an emergency bankruptcy petition by completing the following forms:
Some courts might require additional forms. You’ll want to check with your local bankruptcy court to learn the requirements in your district. You can find it using the Federal Court Finder. The official bankruptcy forms are on the U.S. Courts bankruptcy form webpage.
Again, after filing the emergency petition, you have 14 days to file the rest of the required bankruptcy forms and schedules. Failure to do so will typically result in the dismissal of your case without prejudice (you can file again right away).
To learn more, see How to File an Emergency Bankruptcy Petition.