Involuntary Bankruptcy in St. Paul

If you face involuntary bankruptcy in St. Paul, it is important to respond quickly to the petition. If your creditors are taking this action, you need an experienced bankruptcy attorney to help you protect your rights and fight back.

At Walker & Walker Law Offices, PLLC, we have extensive experience in all forms of personal bankruptcy. We can support you throughout the proceedings and help you resolve the matter effectively. Contact us today to schedule your initial consultation.

What Is an Involuntary Bankruptcy?

An involuntary bankruptcy happens when creditors believe you have the funds to pay your debts but are choosing not to do so. If the creditors are concerned that you might transfer or dissipate the assets you have, they might file a lawsuit forcing you into bankruptcy to claim their debts.

Creditors often target businesses with this legal maneuver, but sometimes individuals can face involuntary bankruptcy. While it is not the most efficient option available to creditors, it can make sense if they believe you have substantial assets.

An involuntary bankruptcy petition can force you to account for your assets and allow the creditors to establish their claims. If your creditors have filed a petition for involuntary bankruptcy against you, contact our St. Paul attorneys immediately.

The Involuntary Bankruptcy Process

Creditors must qualify to force someone into involuntary bankruptcy. According to 11 United States Code §303, only creditors whose claims are not in dispute or subject to any future event can petition for an involuntary bankruptcy.

A single creditor can bring a petition if the debtor has fewer than 12 creditors. If the debtor owes money to 12 or more creditors, at least three of them must jointly file the involuntary bankruptcy petition. The creditors must have at least $19,250 in unsecured claims against the debtor—this threshold changes periodically.

After you receive an involuntary bankruptcy petition, you must answer it within 21 days. If you fail to respond, creditors can force you into either Chapter 7 or Chapter 11 bankruptcy. Our St. Paul legal team can explain the potential consequences of being forced into bankruptcy, file a timely response on your behalf, and represent you throughout.

Resolving the Case

When you receive an involuntary bankruptcy petition, you have several options. You can consent, and the proceedings will convert to a voluntary Chapter 7 or Chapter 11 bankruptcy.

You can also contest the petition. If the petition is legally defective or creditors submitted the filing in bad faith, a bankruptcy judge could dismiss the case and award you court costs and attorney’s fees. Alternatively, you could argue that the judge should refuse to hear the case because an involuntary bankruptcy does not best serve the interests of the creditors or you.

Deciding how to respond to an involuntary bankruptcy petition requires a thorough analysis of your financial situation and your goals. Our St. Paul attorneys will take the time to thoroughly understand your circumstances and advise you about the impact of various responses to an involuntary Chapter 7 or Chapter 11 petition. We can then proceed according to your direction.

Work With Our St. Paul Attorneys To Respond to an Involuntary Bankruptcy Filing

If you are facing involuntary bankruptcy in St. Paul, contact Walker & Walker Law Offices, PLLC right away. We can explain your options and help you decide how to proceed. Our initial consultations are free, so reach out to our team today.