A creditor is an individual who is owed money. There are different types of creditors. Petitioning creditors are parties who are owed money from a debtor and who apply to the court of bankruptcy in order to secure a debtor’s property and distribute it equally among them all.
Under certain circumstances, petitioning creditors can force a debtor into bankruptcy without his/her consent. This is called an involuntary bankruptcy petition. When an involuntary bankruptcy petition is filed, a receiver or trustee is appointed to take charge of the debtor’s property until the case is judged. Receivers and trustees who are appointed to do this often must furnish a Petitioning Creditor’s Bond.
What is a Petitioning Creditor’s Bond?
A Petitioning Creditor’s Bond is a type of plaintiff surety bond used in bankruptcy court. A Petitioning Creditor’s Bond is required of the officer who is appointed to take the property of the bankrupt individual until the case is closed.
The bond is set in place to indemnify, or compensate, the debtor against damages and costs should the court case be dismissed or withdrawn. If the court decides to not declare the debtor bankrupt, the bond protects them from any damages or loss.
A Petitioning Creditors Bond usually remains in force for only a short time, until the hearing has been had and the alleged bankrupt is either adjudicated or the petition is dismissed.
Getting a Petitioning Creditor’s Bond
Just like all surety bonds, Petitioning Creditor’s Bonds are underwritten (or evaluated for risk) before they are issued. Petitioning Creditor’s Bonds are written freely for applicants with a good background and a reasonable amount of financial worth relative to the size of the bond.
To get a Petitioning Creditor’s Bond, you will need to work with a reliable surety bond company.Surety Solutions has relationships with over 30 different insurance carriers to make sure you are getting the best price for the surety bond you need. Need a court bond? We can help. Get your free quote today.