Last week, I was contacted by a woman who was completely frantic. She informed me that her home was in foreclosure and she was considering bankruptcy as an option to save her home.
Sounds good so far right?
As our conversation progressed, she informed me that her home was scheduled to be sold at auction in less than 24 hours! Knowing that the average foreclosure process in New York takes approximately 906 days, this was shocking to me.
Pushing thoughts of procrastination out of my head, I started grinding my attorney gears to see how I could help. I ultimately decided I could not.
I made a commitment to myself and the people that put their faith in me that I will be a strong advocate for their cause. At the same time, I thoroughly respect the bankruptcy process and the power it has to restore people financially.
Filing a “bare-bones” emergency bankruptcy petition on the eve of a foreclosure sale does not always comport with my duties as an attorney.
The Emergency Petition
Typically, an emergency bankruptcy filing is only three pages long and contains the minimum amount of information required to generate a case number and invoke the automatic stay. This is usually done to prevent a foreclosure sale, wage garnishment or property eviction.
While the initial emergency petition may take only minutes to prepare and file, it has the potential to create a lifetime of financial disaster.
Within 14 days of the filing of the emergency petition, the rest of the petition along with all supporting documents must be submitted to the court in order for the case to proceed. It is almost unreasonable to think that someone who waited until the last possible moment to get help is going to be able to provide all the information and documentation needed within 14 days.
As such, dismissal is likely.
Contradiction and Conflict
A bankruptcy petition can take weeks, if not months to prepare and file. I like to think of each bankruptcy case as a living, breathing entity that is constantly evolving.
I believe that debtor and attorney must form a relationship and work together in unison to create a successful and satisfying case outcome. Information must be shared and communication must be kept open.
It is important that debtor and attorney are on the same page. Pre-filing planning is to me, the most important part of a bankruptcy case.
It is during this planning stage that assets can be strategically protected and potential pitfalls are disclosed. This could take weeks or even months. To think this could happen in a matter of hours is unrealistic and can be dangerous.
Finally, as attorneys, we have a duty to the court to exercise due diligence by analyzing and verifying a ton of information. Again, skirting these responsibilities can cause serious problems for attorney and debtor.
I am aware that many bankruptcy attorneys have no problem filing emergency petitions. In fact, I believe I am in the minority on this issue. For some people who are at the end of the line and bankruptcy is the only option, there is help available.
I feel that it is quite difficult, if not impossible to squeeze the entire pre-filing bankruptcy process into a period less than 24 hours. I am very curious to see what others think.
Image courtesy of seier+seier (Flickr).