Involuntary Bankruptcy

Most bankruptcy cases are filed by the debtor himself. These are "voluntary" bankruptcies (although few would "volunteer" to be in this position).

Not all bankruptcy proceedings are voluntary, however. Under Chapters 7 and 11, creditors also have the option of filing for relief against the debtor, in which case the proceeding is called an "involuntary bankruptcy."

Involuntary bankruptcies are allowed only when certain minimum thresholds are met. For instance, there must be a minimum number of creditors and a minimum amount of debt. The debtor has the right to file a response to an involuntary petition, after which the court will determine whether the creditors are actually entitled to relief.

If the court dismisses an involuntary bankruptcy filing because it has no merit, the creditors may be ordered to pay the debtor's attorneys' fees, damages for any losses the debtor experienced because of the bankruptcy, and even punitive damages to punish the creditors for the frivolous or abusive filing of a petition.

An experienced bankruptcy attorney can provide essential advice whether you are a debtor considering voluntary bankruptcy or facing an involuntary bankruptcy proceeding, or a creditor seeking relief through an involuntary bankruptcy.