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:

1. your name/social/address
2. your online bk class certificate (this takes you 1 hour to complete)
3. a list of creditors.
4. 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: https://robertspaynelaw.com/myutahbankruptcyblog/2015/04/06/how-long-does-it-take-to-prepare-the-bankruptcy-paperwork-in-an-emergency/

Oh yes he is! And even worse, the bankruptcy trustee can take any money you have in hand or on deposit on the day we file.

On the day we file bankruptcy, you don’t want to have much in the way of liquid assets (like cash or money on deposit on a bank account). In theory, the trustee can take the money you had on the day you filed and use it to pay creditors. This means Venmo as well!

For instance, let’s say you file a chapter 7 bankruptcy today and have $1,500 in your bank account on the date of filing. Tomorrow, you spend that $1,500 on your monthly rent. One month later, when you meet with the bk trustee, he will ask you to turn over that $1,500 so that he can use it to split between your creditors. When you try to explain that you spent the money on rent after filing, he won’t care. You had it on the day of filing, and he wants it now.

On the day you file bankruptcy, your bankruptcy estate is created. Everything you own on that day is part of your estate. Basically, the bankruptcy paperwork takes a snapshot of your assets for that day. (If you receive your paycheck the next day, that’s okay. You didn’t have those funds on the day you filed). The trustee goes through your estate, takes things that can’t be protected (like the $1,500) and uses them to pay creditors.

On the day you filed, you had the money, and he wants it. It wasn’t your money to spend. It was (and is) his. If you cannot turn over those funds, the trustee can make your case fairly awful. In extreme circumstances, he can even throw out your case and deny you a discharge of your debts.

One month after we file, the bk trustee will ask for a copy of your bank statements going back anywhere from 1-3 months before you filed. This shows all of your transactions and payments. This shows clearly when you paid your mom back or when you transferred money to your Venmo account to hide it from the trustee.

Unfortunately, the trustee has been doing this much longer than you, and he has seen almost every trick people use to hide money. He will ask for transaction reports or statements from not only your bank accounts, but your quasi-financial accounts like Venmo, Cashapp, Paypal, and any others that you can think of. If you had money in those accounts (or strange transactions), it can cause a world of hurt for you and your case.

The safest way to handle it is to disclose everything honestly. If you have a little extra money right before filing bankruptcy (which is rare), go build up your food storage. It’s hard to punish someone for stocking up their food storage to weather a storm.