Chapter 7 Involuntary Bankruptcy Petition

Question 1

If there is less than 12 Creditors

Answer 1

Only 1 creditor can force a debtor into Bankruptcy as long as that creditor is owed at least $15,325 of unsecured debt. If not then the aggregate claim total must equal or exceed $15,325

Question 2

Secured Debt

Answer 2

is not included in the claim total

Question 3

You can be forced into bankruptcy if

Answer 3

If you are not paying your debts as they become due

Question 4

Once petition is filed

Answer 4

Court appoints an interim trustee

Automatic stay against the debtor estate

Question 5

After selling all the Debtor assets and payment of administrative expenses what is the order or priority

Answer 5

1) Secured Debt (higher priority over admin expenses)
2) Unpaid income taxes
3) Unsecured Creditors that filed on time (including excess on home sold)
4) Unsecured Creditors who did not file on time

Question 6

If there are more than 12 Creditors

Answer 6

At least 3 can force a debtor into Bankruptcy as long as the total owed is at least $15,325 of unsecured debt

Question 7

Who are exempt from involuntary bankrupcy

Answer 7

Persons (individuals, partnerships, corporations) owning less than $15,325
Farmers
Charitable Organizations