In some cases, those who file for bankruptcy have been considering this opportunity for a long time. They’ve been slowly watching their debt become insurmountable. They may have been looking into all of their legal options and trying to determine what will work the best.
But in other cases, filing for bankruptcy is an emergency situation. There isn’t any time to wait and mull over options. An individual needs to use an emergency bankruptcy filing to remain financially stable. Why would this be a helpful approach?
Addressing potential ramifications
Essentially, an emergency bankruptcy filing is just a filing that is prepared quickly to avoid serious financial challenges. These could include things like auto repossession, wage garnishment or even home foreclosure.
For example, someone may be facing foreclosure because they lost their job and they can no longer afford to pay their bills. But they have a family and they have nowhere else to live. They need more time to figure out their financial situation. What they can do is file for bankruptcy, which creates an automatic stay on the foreclosure case.
This doesn’t mean that foreclosure can never happen. But it does mean that a lender’s case almost certainly must be put on pause until the bankruptcy case is resolved or dismissed. Since bankruptcy itself can take between a few months and several years, the automatic stay should protect the family’s home for that time and give the filer a chance to stabilize their mortgage repayment situation.
Considering your options
If you are facing debt Issues and you’re unsure how to proceed, be sure to carefully consider your legal options. If you think that you can potentially benefit from an emergency bankruptcy filing, know that it will take some time to draft your bankruptcy petition and that you must complete a pre-filing educational requirement before the court will accept your filing. As a result, you’ll want to seek legal guidance as soon as possible to get started.
