Bankruptcy Defined: Voluntary and Involuntary
Author: Gilbert Bermudez
Bankruptcy defined as a legally declared inability or impairment of ability of an individual or organization to pay its creditors. As a result, creditors may file a bankruptcy petition against a debtor (“involuntary bankruptcy”) in an effort to recoup a portion of what they are owed or initiate a restructuring. In the majority of cases, however, bankruptcy is initiated by the debtor (a “voluntary bankruptcy” that is filed by the insolvent individual or organization).
- Involuntary bankruptcy
A type of bankruptcy that is initiated by at least three creditors holding unsecured claims aggregating at least ,000 against the debtor. In some cases, creditors may file a petition to commence an involuntary bankruptcy. Creditors may commence a Chapter 7 or a Chapter 11 case if they hold the required amount of debt.
- Voluntary bankruptcy
Bankruptcy filed by the debtor itself; this type of bankruptcy has a lots of investigation involved by both creditors and court.
Although bankruptcy usually attached with bad stigma and is publicly advertised, it should always be considered when dealing with individual insolvency cases for bankruptcy alternatives.
Please note that if you are ever faced with the prospect of bankruptcy you should look at alternatives as soon as possible such as if you’re in the UK the Individual Voluntary Arrangement procedure (IVA). Same as if you are residing in the US you can count on bankruptcy alternatives by Total Debt Services. Get a free consultation request; try visiting their website at totaldebtservices.com.
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Can a person file Chapter 7: Involuntary Bankruptcy against a business partner that is no longer paying debt?
I own a business with 2 other people… they stop paying our combined debt… can I petition a Chapter 7 : Invomuntary Bankruptcy against them in order to pay off our combined debt?
I need help understanding bankruptcy law with a partnership HELP?
In March 1988, Daniel E. Beren, John M. Elliot, and Edward, F. Mannino formed Walnut Street Four, a general partnership, to purchase and renovate an office building in Harrisburg, Pennsylvania. They borrowed more than $200,000 from Hamilton Bank to purchase the building and begin renovation. Disagreements among the partners arose when the renovation costs exceeded their estimates. When Beren was unable to obtain assistance from Elliot and Mannino regarding obtaining additional financing, the partnership quit paying its debts. Beren filed an involuntary petition to place the partnership into Chapter 7 Bankruptcy. The other partners objected to the bankruptcy filing. At the time of the filing, the partnership owed debts of more than $380,000 and had approximately $550 in the partnership bank account. Should the petition for involuntary bankruptcy be granted?
Should the petition for involuntary bankruptcy be granted? Explain. ?
In March 1988, Daniel E. Beren, John M. Elliot, and Edward, F. Mannino formed Walnut Street Four, a general partnership, to purchase and renovate an office building in Harrisburg, Pennsylvania. They borrowed more than $200,000 from Hamilton Bank to purchase the building and begin renovation. Disagreements among the partners arose when the renovation costs exceeded their estimates. When Beren was unable to obtain assistance from Elliot and Mannino regarding obtaining additional financing, the partnership quit paying its debts. Beren filed an involuntary petition to place the partnership into Chapter 7 Bankruptcy. The other partners objected to the bankruptcy filing. At the time of the filing, the partnership owed debts of more than $380,000 and had approximately $550 in the partnership bank account. Should the petition for involuntary bankruptcy be granted? Explain.
Do you have to be a creditor to file an involuntary bankruptcy petition?
If you co-sign on a loan can you file an involuntary bankruptcy petition if the other person is not paying on the loan?
Or for instance you are in a partnership and none of the bills are being paid can you file an involuntary bankruptcy petition against the other partners?
Where does the US Treasury file for bankruptcy?
I am assuming a voluntary filing, not an involuntary petition filed by a creditor.
I am presuming that the Treasury can choose its venue, and is not facing an adversarial bankruptcy from a creditor.
I realise that the Treasury hasn’t yet admitted that it is bankrupt, but it is admittedly insolvent.
I would think Bowling Green, in the Southern District of New York, where the NY Fed, the principal creditor operates. Also, most active bankruptcy judges.
I don’t know where the Treasury’s organising documents call its home venue.
afaik, it takes a minimum of three creditors who are each owed at least some minimum amount [in the thousands of dollars] to file an involuntary petition in bankruptcy against a debtor.
Finding the other two is your problem.
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This illustrates one of the issues with co-signing loans. The bank won’t make the loan at all unless you agree to be a “co-maker” [equally liable]. Yet, that isn’t the position most co-signers really want — what they want is to be liable only for missed payments and/or the balance remaining if the debtor stops paying.
So what a co-signer really wants is the right and obligation to buy the remaining debt if and when the debtor stops paying.
That would make the co-signer an undoubted creditor and transfer any security interest in the collateral [example: an auto loan] to the co-signer.
My advice — NEVER co-sign a loan. If you have that sort of assets and are willing to take the risk, counter offer to the bank that you will deposit the full amount of the funds at the bank and thus guarantee the loan with your deposit — in exchange for which, you get to take over the bank’s position [and seize the collateral] if the debtor stops paying.
No, if they were all equal partners then it takes the agreement of all three.
I want to find out where you intend to practice. I don’t want you as a lawyer. Do your own work.
How lawyers are you expecting to find here that could answer your question?
It depends on what type of partnership you had. Limited partnerships make you only responsible for your share of the debt. You did form a formal partnership didn’t you? You may be stuck.
I suppose if it did happen, DC federal district court