An emergency bankruptcy (sometimes referred to as a skeleton bankruptcy) can be filed to stop a foreclosure, however it is not a good idea to wait to the last minute to stop a foreclosure for a number of reasons.
First, the changes made by the Bankruptcy Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) require that the debtor(s) undergo Credit Counseling before the filing of a bankruptcy and that a copy of the certificate showing that the credit counseling was completed by attached to the bankruptcy petition.
The failure to take the credit counseling and attach the certificate can result in a dismissal of your bankruptcy.
In my office, I have had a number of occasions where we have been able to help a client complete the credit counseling in enough time to file bankruptcy before a foreclosure, but it is not advisable to wait until the last minute to file.
Secondly, in Louisiana where I practice, the creditor and its attorney are incurring additional costs, expenses and fees by filing for a foreclosure.
If you are going to try to file a Chapter 13 bankruptcy and keep the house, the longer you wait the more costs, expenses and fees are going to be tacked on to the amount you owe the creditor.
Third, it has generally been my experience that it is all but impossible to properly advise a client as to the type of bankruptcy that is best for them in an emergency setting.
In Louisiana, the sheriff serves a Notice of Seizure on the debtor. In most cases, the date of the foreclosure is at least a month or more from the date of service of the notice.
Because of this advance notice, there is really no practical reason to wait to consult an attorney to discuss the options available to you regarding your home.
by Kevin Gipson, New Orleans, Louisiana bankruptcy lawyer.