Involuntary Case

11 U.S. C. § 303 - Involuntary Cases

Fed. R. Bank. P. 1003

 

The debtor is identified as an alleged debtor until the Court enters the Order for Relief.

 

Creditors of a debtor may file a petition for involuntary bankruptcy under Chapter 7 or 11 if the debtor is unable to pay his debts and creditors suspect that the debtor may conceal or otherwise dispose of assets without consideration  to creditors.

 

If the debtor has 12 or more creditors, the proceeding is commenced by three or more creditors with claims of an aggregate amount of at least $13,475 excluding liens on the property and contingent and disputed claims.

 

If the debtor has fewer than 12 creditors (excluding family, employees or transferee of a voidable transfer), the action is commenced by one or more creditors) who has a claim(s) in the aggregate of at least $13,475 or more, excluding liens and contested claims.

 

If the debtor is a partnership, and the action is commenced by fewer than all of the partners in the partnership, it is considered adversely in nature and would be an involuntary bankruptcy.
 

 

The following persons or entities are not subject to an involuntary bankruptcy proceeding:

  • Municipalities

  • Farmers and Fishermen

  • Nonprofit organizations or corporations

  • Churches

  • Schools

  • Charitable organizations

  • A debtor’s spouse, who is a non debtor, may not be joined in an involuntary proceeding.