How to Contest Bankruptcy

Avoid involuntary bankruptcy.

Bankruptcy gives people with a significant amount of debt a way to obtain some relief. Bankruptcy releases the debtor from responsibility for all financial obligations accrued before he filed the bankruptcy petition. Debtors initiate most bankruptcy cases. However, if you are very deeply in debt, creditors can force you into involuntary bankruptcy by filing a petition with a bankruptcy court. You have the right to contest bankruptcy.

Instructions

1. 

   Call your creditors who filed the involuntary petition for bankruptcy and try to arrange a settlement.

   Contact the petitioning creditors. Try to negotiate arrangements for payment. You may be able to persuade them to drop the bankruptcy petition.

2. 

   If the creditors made a mistake you may be able to avoid bankruptcy.

   Check for accuracy the Proof of Claim filed by the creditor. If any of the information on the petition is false, fictitious or fraudulent, or if you can prove that one or more of the petitioning creditors is not an entitled creditor, you can ask the court to dismiss the bankruptcy petition.

3. 

   If you can prove you have been paying down your debt, you can contest bankruptcy.

   Collect all of your checks and receipts for bills and payments on debt. According to AllBusiness.com, if you can prove you are keeping up with your bills and have been paying on your debt as it comes due, you can ask the judge to dismiss your creditors' case.

4. 

   Contest bankruptcy by filing a motion to object.

   File a motion to object at the bankruptcy court within 21 days of the filing of the bankruptcy petition. A motion is a form used to tell the bankruptcy judge whether or why you want a hearing. You must attach an affidavit and memorandum to the motion. Use the affidavit and memorandum to explain in detail why you think you should be granted an objection to the bankruptcy petition. An affidavit is a sworn statement that provides the judge with information or arguments to support your objection.

5. Notify the parties involved in your case about your objection to their petition for bankruptcy. Usually this is done by a sheriff's department, which serves the petitioners with a copy of your motion to object, along with the affidavit and memorandum you put before the judge. You can hand-deliver these documents yourself if you choose.

6. 

   Show up at bankruptcy court on time and prepared.

   Go to trial. You should receive a notice in the mail telling you when the judge will hear your case. Show up on time and have all of your arguments written out so you can read them clearly when it is your turn to speak.

7. 

   If you contest bankruptcy and win, you may be able to seek damages.

   Request damages, if you win your case, for any loss of business you may have suffered as a result of the bankruptcy case. If the bankruptcy petition was dismissed based on creditors' failing to meet legal criteria, the judge may grant you damages to compensate you for your time and any attorneys' fees you may have incurred. AllBusiness.com says you also have a right to seek punitive damages beyond those the judge deems appropriate to compensate you for your losses.

References

• Cornel University Law School: US Code Title 11 Rule 386
• Cornel UniversityLaw Scool: Rule 9014. Contested Matters
• Cornel University Law School: Rule 1004. Involuntary Petition Against a Partnership
• AllBusiness: "Bad faith" and Involuntary Bankruptcy Filings
• Open Jurist: United States Code, Title 11, Section 3--Involuntary Bankruptcy Cases

Resources

• Personal Bankruptcy Information: U.S. Bankruptcy Courts
• Alaska Superior Court; Affidavit and Memorandum Form
• Alaska Superior Court: Sample Motion