Creditors frustrated in their collection efforts often feel they have run out of options in pursuing the non-paying and non-responsive debtor. However, they invariably feel empowered when someone — most likely a lawyer for them or another aggrieved creditor — suggests that an involuntary Chapter 7 petition be filed against the debtor.
Therefore, involuntary petitions often follow a suspicion that the debtor has been less than forthright in its dealings with its creditors. The creditors reason that by filing the petition, the debtor will be put under the jurisdiction of the bankruptcy court which will, in turn, oversee the assembling and distribution of the debtor’s assets.
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