Being forced into bankruptcy
If a person has alot of debt but does not want to declare bankruptcy, are there some cases where creditors can go to court and have an order made to force a person into declaring bankruptcy? If so, under what circumstances would this occur?
The law certainly provides a method for a person to be petitioned (forced) into bankruptcy, but it is very rarely used.
Think of this from your creditors perspective – if you aren’t bankrupt your creditors have the right to take you to Court and try and either seize your assets (the things that you own) or garnishee your wages – or both.
Once you file bankruptcy, your creditors may no longer take you to Court, you are protected by the bankruptcy.
In addition, if a creditor petitions you into bankruptcy, the creditor must guarantee the Court costs and trustee fees for your file. That means they need to spend more money in the hopes of recovering some of it from a bankruptcy.
It just doesn’t happen often enough for most people to worry about it.
On the other hand, it is usually the person that is in debt that needs/wants to file bankruptcy in order to obtain the Court protection that I wrote about earlier.
If you have specific questions about your own situation, I suggest you contact a local trustee to discuss them.