Then there is this; Lessons Soon To Be Learned
Post# of 39368
Posted On: 12/18/2013 4:03:53 PM
Then there is this;
Lessons Soon To Be Learned by the Petitioners
First , do not file an involuntary bankruptcy petition unless you are certain that standing exists. In assessing standing, keep in mind that a court may scrutinize the merits of a claim that is subject to a bona fide dispute. Attorneys’ fees and costs may be awarded simply if the petition is dismissed without consent. A finding of bad faith is not required before awarding attorneys’ fees and costs.
Second , remember that bankruptcy serves as a collective debt-collection device. Therefore, unless certain that an involuntary case will benefit all creditors as a group, do not file an involuntary bankruptcy petition solely to collect your own legal fees. Also, if an alternate forum exists to resolve fee disputes with a former client, this fact may influence a bankruptcy court's finding of bad faith.
Third , be sure to perform a credit check, judgment search, lien search or similar inquiries against a debtor before filing the petition. The lack of such efforts may contribute to a finding of bad faith. If bad faith is ultimately found, punitive damages may be awarded even if actual damages do not exist.
Lessons Soon To Be Learned by the Petitioners
First , do not file an involuntary bankruptcy petition unless you are certain that standing exists. In assessing standing, keep in mind that a court may scrutinize the merits of a claim that is subject to a bona fide dispute. Attorneys’ fees and costs may be awarded simply if the petition is dismissed without consent. A finding of bad faith is not required before awarding attorneys’ fees and costs.
Second , remember that bankruptcy serves as a collective debt-collection device. Therefore, unless certain that an involuntary case will benefit all creditors as a group, do not file an involuntary bankruptcy petition solely to collect your own legal fees. Also, if an alternate forum exists to resolve fee disputes with a former client, this fact may influence a bankruptcy court's finding of bad faith.
Third , be sure to perform a credit check, judgment search, lien search or similar inquiries against a debtor before filing the petition. The lack of such efforts may contribute to a finding of bad faith. If bad faith is ultimately found, punitive damages may be awarded even if actual damages do not exist.
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