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Will Creditors Force You To File For Bankruptcy? – You Must Read This
By LaMesaDuiLawyer | June 28, 2010
Filing for bankruptcy is usually something we think of as a voluntary act in New York. Go to a lawyer, provide documents and complete the process. But in terribly rare cases, creditors may band together and force you to file for bankruptcy.
Initial, let me get one factor out of the method - the probabilities of this happening rely quite a touch on your situation. Involuntary bankruptcy cases sometimes involve businesses and individuals with vital non-exempt assets, and are filed by creditors that are wanting to a manner to urge their hands on those assets.
I have never seen a bunch of credit card corporations get together and force a consumer in New York to file for Chapter 7 bankruptcy. Ever. I'm not saying it can't happen, just that I have not seen it yet. And remember, New York may be a big place - if it's happens in any respect, chances are pretty sensible that it happens here.
Section 303 of the U.S. Bankruptcy Code governs involuntary bankruptcy cases, and provides that three or additional creditors with claims totaling at least $13,475 might file a Chapter seven or a Chapter 11 case against a person. I'm not going to urge into the business aspects of involuntary cases because I don't handle them as a general rule.
There are limitations on the kind of claim {that the} creditors are allowed to have against you, but the most vital one is {that the} claim can't be the topic of a authentic dispute on liability or amount. Which means if you're being sued for a debt and are actively defending the claim in a very New York court, the creditor cannot realize 2 more entities to gang up on you and file an involuntary bankruptcy case.
If your creditors file an involuntary bankruptcy case against you, the law permits you to continue using your property. After all, you'll even sell it or offer it away unless the creditors request {that a} trustee be appointed to seize your assets. The court might require you to post a bond or alternative security to guard the worth of the property.
If a bankruptcy case is filed against you by your creditors, you would like to require immediate action by filing a solution to the petition. If you don't then the court will simply move ahead with liquidating your property.
Before you panic, keep in mind what I said - involuntary bankruptcy proceedings against shoppers are very rare. If a New York involuntary bankruptcy case is commenced it's usually against a huge-money person or corporation.
However if it ever happens to you, don't sit around - do something. Fast. Read more other FREE info about premier credit card, zero percent credit cards and travel credit card
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