Acquiring a huge amount of debt can take a toll on a person, and the immediate relief for this is to file for bankruptcy. The normal route when it comes to bankruptcy is that it will be filed by the debtor. However, it's possible in some cases for a creditor to file one against a consumer. Although involuntary bankruptcy is a rare case, this doesn't mean that it won't knock on your doorstep. Involuntary bankruptcy usually occurs to a business organization rather than the individual themselves.
So, who do you look for if you face such a dilemma? You can seek immediate help through a bankruptcy lawyer in Riva, Maryland. They will give you comprehensive legal advice on your case and how it should be handled.
The Scope and Limitations of Involuntary Bankruptcy
Small-to-medium businesses along with their assets are the normal targets. Debt collection companies go after small businesses who owe them a huge amount of debt. However, filing under a Chapter 13 case is not allowed. A Chapter 13 case will have the debtor be involved in a repayment plan. This could last bankruptcy lawyer riva md between three or five years. The court will permit filing a case under Chapter 7 or Chapter 11, but there's a catch. The following entities below are exempted from this filing:
Fisherman
Farmers
Both husband and wife
Remember, most of these filings are collaborations between several creditors. But there are two situations under which involuntary bankruptcy cases may be filed. If the debtor has 12 or more creditors, then it is required that at least three of them must participate in the filing. These three must altogether have at least $15,775 in unsecured debt outstanding from the debtor. Meanwhile, having one creditor is allowed to file one if the entity is owed at least $10,775.
Creditors often find it difficult to meet the aforementioned criteria. Even if they do find a debtor with these qualifications, creditors are reluctant to push through with an involuntary bankruptcy case for two reasons. First, bankruptcy offers protection, and even a couple of advantages, to debtors. Second, should a court dismiss the case, the petitioning creditor faces numerous costs, not to mention paying for compensatory and punitive damages.
Baneylaw P.C., Bankruptcy and Consumer Law serves Maryland, District of Columbia, and Virginia area. When you come to our office, you will be treated with dignity and respect. We know that unexpected life events can seriously impact finances. Nathan D. Baney is here to help, not judge. He is here to help discharge debts, reorganize your finances, and give the fresh start you need to be financially secure.