What is an involuntary bankruptcy?

involuntary bankruptcy is a bankruptcy that is initiated by a creditor rather than a debtor. This situation is rare for many reasons and is most common in the business world. If a proposal for involuntary bankruptcy is awarded, bankruptcy is in the same way as if the debtor initiates bankruptcy proceedings. Creditors generally only take this measure as a last option because they can be punished if the petition is rejected by the court. The creditors or creditors who submit a petition must be able to prove that the debtor does not normally pay debts and is unable to do so. The payment of a single service is simply missing, for example, it is not a reason for Bankruptcy nedvrovotuy.

If there are fewer than 12 creditors, one creditor may file against the debtor. More than 12 creditors and the case must be submitted at least three creditors who serve together. The judge will hear an involuntary proposal for bankruptcy and determine, whether he will do it or not. If granted, the court will initiate bankruptcy proceedings. Business can be liquidated, in which case it will be divided from each other and all the remaining assets will be used to settle the debts. It can also be reorganized.

There are certain limitations of creditors trying to initiate involuntary bankruptcy proceedings against their debtors. If someone has already sued to recover the debt and the debtor, for example, refers to, that person cannot file an involuntary bankruptcy petition. Similarly, creditors must be owed to a certain amount of money for the petition to continue most of the regions that are designed to prevent situations in which people are forced to bankruptcy by trivial debts.

For the creditors, once the announcement is received, that the petition of bankruptcy was submitted in involuntary bankruptcy, it is advisable to keep a lawyer if it has not yet happened. If the petition is rejected, creditors may be forced to pay fees for the debtor's legal representation and may also be obliged to fillAtit replacement. Having an active lawyer at the beginning can increase the chances of a successful fight against the petition and restore damage.