Is Your Lawyer Protecting You By Filing An Involuntary Chapter 7 Petition Against a Debtor?

Recently the chairman of a large firm's bankruptcy division filed an Involuntary Chapter 7 petition against a debtor on behalf of 4 creditor clients. When the case was ultimately heard by the U.S. Bankruptcy Judge Novalyn Winfield dismissed the Chapter 7 petition finding the Debtor had been paying their debts with certain exceptions for which they expressed reasons. As a result of hardships caused them by the bankruptcy petition, the debtor sought compensatory and punative damages as well as legal fees and costs resulting from the creditors' bad faith filing. Prior to the judge deciding the matter of damages and costs, settlement was reached between the debtors and creditors resulting in $4.45 million in costs to the creditors as a result of the failed suit. Although there is evidence the attorney filing on behalf of the creditors may not have undertaken due diligence in investigating the financial condition of the debtors, the firm he is umployed by maintains that the creditors are simply unhappy with their results and do not wish to pay their legal fee, which was described by the firm which filed the petition as being in "the significant six figures." If you are attempting to pursue a debtor, facing foreclosure, considering bankruptcy or filing an involuntary Chapter 7 petition against a debtor, you should seek experienced legal counsel who will act in your best interests in order to protect your rights. For more information on foreclosure, bankruptcy or other consumer debt related matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and in no way intended to replace the advice of an attorney regarding your specific matter.