You Do Not Have to be Broke to File Bankruptcy

You do not have to be “broke” i.e. insolvent to file bankruptcy, in fact, you can be perfectly flush with cash. In this case, the debtor, a Mr. Sultan Soliman, filed to fight off a claim resulting from biting another person’s nose. He had assets of $447,775 and $255,500 in debts. The protection of the automatic stay is the chief benefit of filing for bankruptcy, something that a debtor can not use in state court. This “breathing room” usually allows a more reasonable settlement of claims. However, filing bankruptcy to fend off one creditor is risky; a bankruptcy court could find that the filing is in “bad faith” and dismiss the case, putting the debtor right back where he was before.

You can read more about this case at the Wall Street Journal’s online site. http://blogs.wsj.com/bankruptcy/2014/09/08/a-bite-a-bankruptcy-a-100000-bill/