As Halloween approaches the thought of creatures that go bump in the night cross my mind and in the spirit of it all I want to talk about skeletons, skeleton petitions that is. Stop me if you heard this one, a potential debtor walks into a bankruptcy attorney’s office and says “I need to file for bankruptcy, my home is going to be sold in two days.”
Now why does this type of debtor always wait until the last minute to file is beyond me? I am sure there are a few valid reasons but now the pressure falls onto the attorney to get this Chapter 7 or Chapter 13 case filed in time. One option is to file what’s called a skeleton Chapter 7 or Chapter 13 bankruptcy petition or what others may call a bare bones petition. Basically you end up filing at least 6-7 essential pages of the Bankruptcy Petition so that the debtor has the protection of the automatic stay. Now the clock begins and now the bankruptcy attorney has approximately 14 days to get the deficiency schedules completed and filed with the bankruptcy court in time. Here is where issues tend to arise.
1. Your constant calls to the debtor to obtain additional information go unanswered.
2. Your letters to the debtor reminding the debtor of the deadline and possibility of dismissal go unanswered.
3. 2 -3 days before the deadline the debtor finally responds and only gets you a small handful of the documents you requested.
4. The debtor simply ignores your correspondence and the case gets dismissed and then the debtor finally calls your office complaining about why is their Chapter 7 or Chapter 13 bankruptcy case is dismissed.
This list could go on and on but how the bankruptcy attorney handles these scenarios is very important. The bankruptcy paralegal should remind the attorney of the impending deadline and always ask and go over different scenarios of how the bankruptcy attorney wishes to handle that particular case.
Some attorneys find themselves in a bad position when they file blank deficiency pages just to buy their client additional time to gather the documents. The problem with this is that when this is done several times they may find themselves at the receiving end of an Order to Show Cause filed by the Bankruptcy Court and their fees being disgorged.
Filing a bankruptcy skeleton petition can be a helpful tool if done properly, one of my suggestions to my clients can be found in my article titled C.Y.A. and a few of my other suggestions to my clients are the following:
1. Prior to filing the skeleton petition make sure the debtor at least provides your firm with 75% of the required documents to help expedite the process of filing the deficiency documents.
2. Have the debtors sign off on a letter stating that they are aware that the remaining documents, that they are expected to be provided to the attorney’s office within 7 days or risk having the case dismissed. Make sure the letter indicates the required documents and the deadline date.
3. Once all the documents have been provided and the deficiency documents have been completed, have the debtor initial each page in the corner to verify that they reviewed each particular page.
Skeleton Chapter 7 or Chapter 13 Bankruptcy Petitions can be very helpful in a crunch but bankruptcy attorneys should always make sure to protect themselves when handling these types of bankruptcy cases.
Outsourced Paralegal Services, LLC was created with the sole practicing attorney and boutique law firm in mind. Outsourced Paralegal Services, LLC has provided extensive legal support services to attorneys and has filed over 500 consumer bankruptcy petitions in states such as New York, California, New Jersey, Connecticut, Florida, North Carolina, Texas, Idaho and Georgia. Please feel free to visit us at www.outsourcedparalegal.com