I had reported last month that Nadya "Octomom" Suleman had filed bankruptcy. However, as happens in so many cases, it was dismissed two weeks later. Why? Because she didn't file all of the documents she was supposed to. This may seem odd, but it is quite commonplace.
Why Not File Everything?
People in financial difficulty are often pressed for time to file, either because of an imminent sheriff sale, wage execution, or eviction. Because of this, they many times do not have all of the necessary information together to file a complete bankruptcy petition. What is then done is the filing of a "bare bones petition," something that includes very little information about assets, income sources, living expenses, and (often) a list of creditors. When this happens, the debtor has two weeks to file the rest of it or face dismissal of his or her case. Well, that is what happened to the Octomom.
Why Was It a Mistake Not To?
Ms. Suleman was facing the foreclosure sale of her home and filed to stop it. The irony of the whole thing is that the chapter 7 bankruptcy she filed would not stop the foreclosure for very long, so her rushing to file really did not help her.
In addition, had she waited until after she had all of her information together to file, she would have benefited greatly from the bankruptcy process. This is because:
- She had no means testing issues because she maintains a household of 15 (herself and 14 children), so she could earn up to $159,667 annually and still qualify for Chapter 7
- The house was apparently the one real asset she had, and she was going to lose it anyway due to an inability to pay the mortgage
- She has close to $1 million in debt that she could have gotten discharged had she filed properly.
On top of all of that, the dismissal of her case will make it even more difficult to file. Under the bankruptcy code, if a case is dismissed and another one is filed within a year, the automatic stay that protects you from creditors only lasts for thirty (30) days, unless you can show changed circumstances to a judge and get the stay made permanent.
Don't Be an "Octomom" Filer!
The lesson here is that bankruptcy is like marriage: done in haste, regretted in leisure. If you are looking to file bankruptcy, be sure that you have an attorney review your situation thoroughly and provide you with all of the options. Then you can proceed appropriately and, hopefully, avoid an "Octomom" outcome.
If you are a New Jersey resident and considering taking this step, please call my office at 856-432-4113 or contact me through this site for a free consultation to discuss your case.