just before a foreclosure sale, to file bankruptcy.
But, it can be done fast.
How long does it take to file bankruptcy?
Individuals now have to complete credit counseling, before a bankruptcy case can be filed. With rare exceptions.
So, you need to be able to get that done.
There are some places with brick and mortar offices you can go to, but most outfits are online, so you just need a computer collection.
Last month, I had a Michigan client facing a foreclosure sale on property he owned in California.
The sale had originally been set in March, and adjourned, as he worked out a sale of the property.
Well, one of my California bankruptcy attorney friends, told the client’s realtor to contact me.
Which she did, on Tuesday evening, with the foreclosure sale set for Friday morning.
Unfortunately, the sale could not be closed that quickly, though there was a purchase agreement in place, which would net my client $129,000.
Of course, I had to talk to the client, who lives in another part of Michigan, hundreds of miles away, personally, before any case could be filed.
He could not contact me until Wednesday, and said his bookkeeper had much of the information I needed.
But I did find out enough to establish that he could file Chapter 13 bankruptcy.
Chapter 13 bankruptcy is the only kind that you have a right to withdraw, or dismiss.
Once you file Chapter 7 or Chapter 11 bankruptcy, you have to file a motion, notify trustees and creditors, and get the court’s permission to withdraw.
If we filed the case in time to stop the foreclosure, and the sale closed, he wanted to pull out of bankruptcy and handle the creditors, and he had plenty of others, himself.
I advised him what information I needed, that he would have to do the credit counseling, and scan me his driver’s license and social security card. This is to verify his identity and signature on the bankruptcy papers.
He did not own a computer, but was able to get to his bookkeeper’s office, where an employee walked him through it on Thursday. I scanned the documents to him, and got back signed copies.
I was able to file the case, all bankruptcy courts are electronic now, Thursday afternoon, and call the foreclosing company to have them cancel the sale.
All within 48 hours of the initial call from the realtor in California.
DO NOT TRY THIS AT HOME!
Contact a bankruptcy lawyer before the last minute, so you can make alternate plans, and, be ready to file bankruptcy, if needed.