Some bankruptcies are filed by creditors who gang up on the debtor when payments to those creditors are substantially delinquent. This is referred to as an “involuntary petition.” On the other hand, when the debtor files a petition for bankruptcy, that’s considered “voluntary.” Involuntary bankruptcy can occur under Chapters 7 and 11, but not under Chapter 13.
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Question: What is the main difference between voluntary and involuntary bankruptcy?
ReplyDeleteVoluntary bankruptcy happens when the person who owes money starts the process themselves.
Involuntary bankruptcy is when the creditors, Sympathy Flowerswho are owed money, start the process instead.It's important to understand the difference because each type has its own rules and effects.This article gives a clear explanation of how these two types of bankruptcy are different.
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