Involuntary Bankruptcy Proceedings

If none of these debt-collection tactics is successful and the debtor owes a substantial amount to several creditors, the creditors may be able to initiate an involuntary bankruptcy proceeding.  If the court accepts the petition, the debtor may be forced to liquidate its assets to pay off its debts, or it may be able to file a reorganization plan that sets out how its debts will be paid.  If the creditors initiate such a proceeding in bad faith, however, they may be subject to severe financial penalties, including punitive damages.