How fast can you file a bankruptcy case to stop a garnishment?
Pretty darn fast.
Honestly, I can prepare and file an emergency case the same day you call. But, and this is a big BUT, there are some things you need to do first.
A full bankruptcy petition is a huge legal document. It is usually 65-85 pages long, not counting the copies of 6 months of your paystubs and your last 2 years of tax returns. Thankfully, you don’t have to file a full petition to stop a garnishment. You can file a skeleton, or skeletal petition, which is literally a bare-bones petition.
What a skeletal petition needs:
- your name/social/address
- your online bk class certificate (this takes you 1 hour to complete)
- a list of creditors.
- payment to your attorney BEFORE you file.
Why do attorneys hate skeletons?
I know, it sounds easy, but there’s a lot that goes into it. Bankruptcy attorneys hate filing skeletal petitions. The reason why is simple: when you’re taking emergency measures and short cuts, you can really screw up a case. Your bankruptcy attorney has to do his “due diligence” on your case, meaning that he has put the time and effort into reviewing your assets to make sure that you don’t have something that you’ll lose in bankruptcy. Examples include too much equity in your home or car, or a huge tax refund that you haven’t received yet, or maybe even an inheritance.
For instance, I had a client once who had the rights to a small portion of the royalties from a James Taylor song. (I think of this case every time I hear “Fire and Rain” on the radio. His portion of royalties amounted to guaranteed income of around $300 a month. If I had filed a chapter 7, the bankruptcy trustee would have sold that right and used the money to pay off creditors. Instead, we filed a chapter 13 and used that monthly income to make a very modest payment to creditors over 5 years. If I had filed a skeleton without all of the facts, my client would have lost the right to receive $300ish a month for the rest of his life. That’s a big deal.
Why do skeletons work?
In many bankruptcy cases, my clients don’t have a proverbial “pot to piss in.” In reality, they probably do own at least one pot, but their assets are minimal or are protected by our state exemptions. If I can carefully review their assets in detail before we file, there’s not much room for error. It helps that I’m old and have done this thousands of times.
Just remember that your attorney is going to want to get paid before he does the work. He will also have to drop everything else he’s doing to prepare the petition. It’s a hassle, for you, for him, and for everyone involved. But, it can be done.
Here is a video I made on filing a skeletal petition (and yes, I know my face is funny. The left side doesn’t work, so get over it).
And here’s an earlier blog post on the same issue:
