A debtor may recover damages against any creditor who filed a bankruptcy petition in bad faith.

Question

Quizplus · Accepted Answer

This is true. If a creditor files a bankruptcy petition against a debtor in bad faith, the debtor can recover damages from the creditor in the form of compensatory and even punitive damages. However, the burden of proof to establish bad faith is high, and there must be evidence that the creditor acted with an improper motive, such as a desire to harass or to gain leverage in another dispute.

A Debtor May Recover Damages Against Any Creditor Who Filed