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Cases of Involuntary Bankruptcy - Advice for Petitioners

Cases of Involuntary Bankruptcy - Advice for Petitioners
"""Voluntary bankruptcy filings are the most prevalent. Nonetheless, there have been occurrences in which a petition has been lodged involuntarily. Although such instances are uncommon, they do occur. If you are a petitioner who occasionally practices in this area, you may find the following advice useful.

Involuntary Cases Are Only Permitted Under Chapters 11 And 7.

You must comprehend that you cannot file an involuntary petition under chapters 13, 12, or 9 of the bankruptcy code, as such actions are only permitted under chapters 7 and 11. Additionally, you are prohibited from filing such cases against non-profit organizations and farmers. If your sole objective is to recover your money by liquidating the debtor's assets and properties, you should petition under Chapter 7. In contrast, if you have a business relationship with the debtor and wish for him or her to be rehabilitated, chapter 11 should be your preferred option. You must be aware that filing for bankruptcy under chapter 11 is more expensive than filing under chapter 7.

A Trustee Can Be Appointed Prior To The Relief Order

You will be pleased to learn that the law permits you to ask the court to appoint a trustee prior to the entry of the order for relief. If the debtor is not responding to your petition and is instead vigorously contesting it, you can compromise for such alternatives. In such instances, he or she may be evicted from their properties. If the petitioner's intent is to prevent the loss of estate property, chapter 7 bankruptcy permits such actions. Alternatively, if you have filed involuntary chapter 11 bankruptcy, the court may order such items if it deems it to be in the best interests of the estate, equity security holders, and creditors. In cases of excessive mismanagement, incompetence, dishonesty, and fraud, the court may also appoint a trustee based on the petitioner's request made prior to the order for relief.

The court may limit the debtor's ability to act.

The bankruptcy court can restrict the debtor's ability to act upon your request. Always keep in mind that requesting the appointment of a trustee prior to the order for relief may not be in your best interest. However, you still have options for limiting the debtor's authority. The power to act encompasses the debtors' ability to act freely and as if nothing has happened. If you believe that the debtor's freedom is negatively impacting your interests, you have the legal right to ask the court to prohibit the debtor from engaging in a specific activity.

" - https://www.affordablecebu.com/

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"Cases of Involuntary Bankruptcy - Advice for Petitioners" was written by Mary under the Finance / Wealth category. It has been read 151 times and generated 1 comments. The article was created on and updated on 03 June 2023.
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