Des Moines, IA (Law Firm Newswire) August 6, 2012 – There are ways individuals and businesses can avoid being forced into involuntary bankruptcy.
The more debt incurred by an individual or company, the higher the risk that creditors will file bankruptcy against them. This is referred to as involuntary bankruptcy, and in some cases, it may be justified. In other cases, it is necessary for the debtor to defend against involuntary bankruptcy petitions in order to avoid surrendering assets or being forced to sell them.
Individuals or businesses who find themselves in receipt of an involuntary bankruptcy petition need to reach out to a qualified lawyer for help indicated Kevin Ahrenholz, an Iowa bankruptcy attorney. If an individual is in receipt of an involuntary bankruptcy petition, one of the first things that must be done, aside from hiring a reputable bankruptcy lawyer, is to find every record on file relating to paychecks, monthly bills, loans, mortgages and lines of credit.
These documents are required to prove the amount actually owed, versus what may be stated in an involuntary bankruptcy petition by a creditor. It is helpful to provide a complete overview of net income and expenses and then break down each month’s financial activity. Bank statements are also used as supporting documentation to clearly prove any past payments to creditors.
The idea is to demonstrate to the court that the financial picture for the debtor is improving. If it can be proved the debtor’s financial liabilities are being paid, and he or she is making an effort to pay off debts owed, this is often enough to defeat a bankruptcy petition. If a debtor is able to prove that their debt is less than $10,000, this may - in most states - defeat an involuntary petition.
Ahrenholz stated that any complaints a debtor files against a creditor must be done within 20 days. The fact that there is an objection filed will mean the case ends up in court. It is rare that it does not. Once in court, if the debtor can prove the creditor is filing to gain favor over other creditors. The court may dismiss the petition, noting that the point of bankruptcy is to distribute assets evenly among all creditors and not just to a select few. In the event that the arguments mounted by the debtor do not convince the court that the bankruptcy is not necessary, the best way to recover a position of control for the debtor is to work towards a Chapter 13 bankruptcy.
Kevin Ahrenholz is an Iowa bankruptcy lawyer and Iowa bankruptcy attorney. To contact an Iowa bankruptcy attorney, Iowa bankruptcy lawyer, or set up an appointment, visit http://www.iowachapter7.com or call 1.877.888.1766.
309 Court Ave., Suite 805
Des Moines, IA 50309
Offices in Des Moines, Cedar Rapids, Waterloo, Mason City, and Vinton.
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