What is a Petitioning Creditor’s Bond? Explained with Example
shared by suretybondauthority on Apr 16
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By law, creditors have the right to file a petition to force a delinquent debtor into bankruptcy when the debtor is reluctant to file a voluntary bankruptcy. Once a petition is filed, the court can de...
clare the debtor bankrupt and appoint a trustee to assume control of the debtor’s assets.
However, before filing the petition, the court will require a creditor to obtain a Petitioning Creditor’s Bond. The primary objective of this surety bond is to guarantee that the creditor will compensate the debtor for all possible damages and costs should the court dismiss or withdraw the petition.
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