It’s very rare for creditors to file a Chapter 7 case against an individual, but if you own a business and your creditors believe you are refusing payment even though you have the means to make payment, they may file an involuntary bankruptcy against your business to force liquidation of assets and collect on their debts.
To start an involuntary bankruptcy, one or more creditors will file a petition in bankruptcy court.
The debtor will have 20 days to respond, which will either produce a hearing where the debtor can present evidence that the bankruptcy petition is in bad faith, or the judge will allow the bankruptcy to move forward.
Typically, creditors can only file involuntary petitions if they are owed in excess of about $14,000, and creditors tend to collaborate in these filings.
They are unusual, but if you’re caught in an involuntary Chapter 7 filing, you should get strong legal support right away.
Call Zelenitz, Shapiro & D’Agostino at 718-599-1111 to learn how to protect yourself and your business in an involuntary Chapter 7 bankruptcy.