11 U.S.C. § 303 — Involuntary cases

(a) An involuntary bankruptcy case can only be started under chapter 7 or chapter 11. It can only be filed against a person who could be a debtor under that chapter — except it cannot be filed against a farmer, a family farmer, or a corporation that isn't a moneyed, business, or commercial corporation. (b) An involuntary case against a person starts when a petition is filed with the bankruptcy court under chapter 7 or 11. This can happen in different ways: (1) Three or more creditors file together, if each holds a claim that isn't contingent or seriously disputed, and together their claims add up to at least $10,000 more than the value of any lien securing those claims. (2) If there are fewer than 12 qualifying creditors (not counting employees, insiders, or certain people who received transfers that can be undone), then just one or more of them can file, as long as their claims total at least $10,000. (3) If the debtor is a partnership, either fewer than all of the general partners can file, or — if all general partners are already in bankruptcy — a single general partner, that partner's trustee, or a creditor of the partnership can file. (4) A foreign representative of the debtor's estate in a foreign bankruptcy proceeding can also file. (c) After the petition is filed but before the case is dismissed or relief is granted, another creditor with an unsecured, undisputed claim can join the petition. Joining has the same effect as being an original petitioner. (d) The debtor — or a general partner who didn't join the petition — can file an answer to the petition. (e) After notice and a hearing, and for good reason, the court can require the petitioning creditors to post a bond, to cover the debtor if the court later awards the debtor damages under subsection (i). (f) Unless the court orders otherwise, the debtor's business can keep operating as normal — using, buying, or selling property — until the court actually orders relief, even though the case has been filed. (g) After a chapter 7 involuntary case starts but before relief is ordered, the court can appoint an interim trustee to take over and run the debtor's business, if needed to protect the estate's property or prevent loss, and after notice and a hearing. Before relief is ordered, the debtor can get the property back by posting a bond, promising to account for and return the property (or its value) if relief is eventually ordered. (h) If the debtor doesn't timely contest the petition, the court must order relief under the chapter the petition was filed under. If the debtor does contest it, the court must still order relief after a trial, but only if: (1) the debtor generally isn't paying debts as they come due (unless those debts are genuinely disputed); or (2) within 120 days before the petition was filed, someone other than a trustee, receiver, or lien-enforcement agent took over most of the debtor's property as a custodian. (i) If the court dismisses the petition — other than by agreement of everyone involved — and the debtor hasn't given up the right to ask for damages, the court can award the debtor: (1) costs, or a reasonable attorney's fee, against the petitioners; and (2) if a petitioner filed in bad faith, damages caused by the bad filing, or punitive damages, against that petitioner specifically. (j) The court can only dismiss a petition after notice to all creditors and a hearing, and only: (1) if a petitioner asks; (2) if all petitioners and the debtor agree; or (3) for failure to pursue the case. (k)(1) If the petition is false or contains a materially false, fictitious, or fraudulent statement, the debtor is an individual, and the court dismisses the petition, the court must — if the debtor asks — seal all court records about the petition. (2) If the debtor is an individual and the court dismisses the petition, the court can also bar consumer reporting agencies from including any information about the petition or case in a credit report. (3) After the criminal statute of limitations for bankruptcy fraud expires, the court can, for good cause and if the debtor asks, erase records related to the petition.