Sometimes circumstances are such that you have to file bankruptcy right away. Perhaps a creditor is threatening to attach your wages or levy your bank account. You may even be facing the imminent foreclosure sale of your home. The question then becomes, can you file right away? The answer is usually yes, but . . .

Should You File Bankruptcy Right Away?

That is really the more important question. In New Jersey, under the bankruptcy rules, you can file what is called a "bare bones" or "skeletal" petition that contains very little information, as long as you file the remaining "schedules" of information within two weeks.

That can be a very bad idea, however, and there are three reasons why.

Bankruptcy May Not Help You

Everyone who files bankruptcy has a goal, usually a financial fresh start. But sometimes a goal can be better accomplished outside of bankruptcy, or only in a particular type. For example, Nadya "Octomom" Suleman filed to stop the foreclosure on her home.

However, she filed a chapter 7, whereas only a chapter 13 would have had the ability let her reach her goal of saving the home. Bankruptcy should always be considered carefully, and the decision should not be rushed.

Bankruptcy May Backfire On You

The proper preparation of a bankruptcy petition takes time and careful review of your entire situation, including all assets, liabilities, income, and expenses. Filing rashly could cause nightmares, such as;

  • The sale of your home by the trustee, because you filed without realizing how much equity you had in it.
  • The dismissal of your case for bad faith because you failed the means test.
  • The trustee suing your mother for the return of all the money you repaid her on the loan she made to you.

You Could Lose the Bankruptcy Automatic Stay

Failure to file all of the "schedules" within the two weeks will result in the dismissal of your case. When that happens, any new filing of bankruptcy will result in an automatic stay that only protects you from creditors for 30 days, unless you can prove changed circumstances to the judge and get the stay extended. This is also what the "Octomom" is facing. For these reasons, you should never rush filing.

So What Do I Do?

If you live in Burlington, Camden, Gloucester, Salem or Cumberland County and are considering filing bankruptcy, please feel free to call me at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case.

If you have more questions about bankruptcy, then download my free book, Top Questions People Ask About Filing Bankruptcy in New Jersey.

Not sure if bankruptcy is right for you? Take the quiz to the right to find out more!

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Steven J. Richardson
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