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 on your home, filing an emergency bankruptcy petition (also called a bare bones or skeletal petition) can delay or stop the foreclosure process and give you more time to negotiate with the bank. Read on to learn more about how to file an emergency bankruptcy petition to stop a foreclosure sale.
For more information on filing requirements, see our Bankruptcy Process topic area.
In general, how quickly a lender can foreclose on your home depends on state law. If you received a foreclosure notice from the bank, read it carefully to determine when your foreclosure (or trustee) sale date is. In most states, your lender must give you ample notice of your default and wait a certain statutory period before it can set 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. This means that bankruptcy can still delay or stop the foreclosure process as long as the home has not been sold yet. But once your home is sold, you no longer own it and bankruptcy can’t help you.
If you don’t have time to complete all required bankruptcy forms and schedules before the foreclosure sale, you can still take advantage of the automatic stay by filing an emergency bankruptcy petition. An emergency petition essentially lets you file for bankruptcy by filling out only a few forms. You then have 14 days to complete the rest of the required paperwork and file it with the court. But keep in mind that you still have to take a credit counseling course before filing an emergency petition.
In most cases, you can file an emergency bankruptcy petition by completing the following forms:
You must also pay the necessary court filing fees or request a fee waiver. However, some courts may require additional forms. As a result, check with your local bankruptcy court to learn the requirements in your district.
To learn more, see How to File an Emergency Bankruptcy Petition.
As discussed, 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 dismissal of your case.