Creditors want to file an involuntary Chapter 7 bankruptcy petition against Debtor Corp. Debtor Corp has 15 creditors with total unsecured claims of 0,000. What is the minimum requirement to file the petition?

Answer options:

At least 1 creditor with an unsecured claim of at least ,775.

At least 3 creditors with aggregate unsecured claims of at least ,775 (adjusted for inflation).

At least 50% of creditors holding 2/3 of the debt.

Any creditor owed more than ,000.

How to approach this question

Check the creditor count: <12 creditors = 1 filer needed. >=12 creditors = 3 filers needed. Aggregate debt must exceed threshold.

Full Answer

B.At least 3 creditors with aggregate unsecured claims of at least ,775 (adjusted for inflation).✓ Correct

At least 3 creditors with aggregate unsecured claims of at least ,775 (adjusted for inflation).

Under the Bankruptcy Code, if a debtor has 12 or more creditors, an involuntary petition requires at least 3 creditors to file, with aggregate unsecured claims meeting the statutory threshold.

Common mistakes

Forgetting the '12 or more creditors' rule and assuming 1 creditor is always enough.

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