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Many people call a Chapter 13 filed on the dawn of a foreclosure sale an emergency Chapter 13. However, it would be more accurate to call it an incomplete Chapter 13.

An emergency Chapter 13 Bankruptcy is often done in order to stop the sale of a property at the very last minute. Sometimes, when negotiating with a lender on a short sale or modification, the borrower is unable to get an extension of the sale date. In those circumstances, the most effective way to halt the sale is to file bankruptcy in Federal Court.

Many attorneys and legal document preparers call this type of filing an emergency Chapter 13. However, there is no such term in the bankruptcy code, and there is no such process built into the bankruptcy system for “emergency filings.”

Under the bankruptcy code, a petitioner may amend a bankruptcy petition up to fourteen days after filing. What an emergency Chapter 13 is then, is an incomplete petition naming only the property being foreclosed on. This is done to expedite the filing process (preparing a full Chapter 13 takes significantly longer). The petitioner may then amend within the fourteen day period to complete the bankruptcy petition.

DISCLAIMER: Filing bankruptcy and dismissing it may prevent you from filing bankruptcy for 180 days or from getting an automatic stay in the future. To find out more, contact an experienced bankruptcy attorney.