Involuntary bankruptcy is a rare form of bankruptcy. It is a form of bankruptcy that is filed by the creditors. It is not filed by the person who owes the money. Involuntary bankruptcies are typically filed against businesses.
Why A Creditor May File Involuntary Bankruptcy
A creditor may choose to file for involuntary bankruptcy if they are unable to get payment from the debtor. Creditors often opt to file for bankruptcy if they know that the business has the ability to pay, but they refuse to pay. Involuntary bankruptcy allows people to collect payments that they otherwise may not have been able to get.
It is rare for an involuntary bankruptcy to be filed against an individual. Most people who have debt only have a few assets. That is why it is usually pointless for a creditor to file an involuntary bankruptcy against an individual.
How Involuntary Bankruptcies Work
The creditor will file a bankruptcy petition in court. After that, the debtor will have 20 days to respond. The debtor will have to participate even if they do not respond. A hearing will be set after 20 days. If the judge rules in favor of the creditor, then the judge will decide that the bankruptcy will go forward. The case will be dismissed if the judge rules in favor of the creditor.
Limits
A solo creditor can only file for involuntary bankruptcy if the debtor owes at least $15,776. If the debtor has 12 unsecured debts, then at least three creditors have to join the petition. Involuntary bankruptcy can be filed under Chapter 7 or Chapter 13.
If you are interested in filing for involuntary bankruptcy, then you will need to contact a bankruptcy lawyer Brighton Beach. A Brighton Beach bankruptcy lawyer can help navigate you through this process.
