Among the bankruptcy questions all debtors ask themselves is whether they can or cannot be sued by the creditors.
Five essential questions and answers about involuntary bankruptcy:
1. Who is eligible?
Not all debtors are. It can’t be filed against a married couple (joint petition), against farmers,banks, non-profit groups, savings and loans institutions, insurance companies and credit unions.
2. What are the requirements?
A debtor cannot be forced into involuntary bankruptcy unless he owes about $15,000 ofunsecured debt.
3. Under which Chapter can I be filed?
Involuntary bankruptcy is limited to Chapter 7 or 11.
4. Can I object to it?
Within 20 days of notice, the debtor has the right to file objections. In a court hearing, both thecreditor and the debtor can assert their cases.
5. What is there to do if I am forced into involuntary bankruptcy?
If you do not want to contest it, you have two options:
- go through with it because bankruptcy offers protection that a debtor cannot get without it;
- convert to Chapter 13 if you think it suits you best.
Even though you may not be threatened by involuntary bankruptcy, as a debtor, you must neverbe shy about asking bankruptcy questions – after all, your finances are at stake.
Voluntary bankruptcy is when people decide to file for insolvency under a certain Chapter,because they are unable to pay their debt. Involuntary bankruptcy is the situation in which a creditorfiles against a person or company that owes money to him.