Involuntary bankruptcy

Involuntary bankruptcy - A proceeding initiated by creditors requesting the bankruptcy court to place a debtor in liquidation.

Chapter seven and chapter eleven of the bankruptcy code allow creditors the option of filing for relief against the debtor, also known as involuntary bankruptcy.

If the creditor initiates the bankruptcy it is called an involuntary bankruptcy. In an involuntary bankruptcy the debtor has the opportunity to contest the petition.

the filing for bankruptcy by a debtor who believes he/she/it cannot pay bills and has more debts than assets. Voluntary bankruptcy differs from "involuntary bankruptcy" filed by creditors owed money to bring the debtor before the bankruptcy court.

See also: Company, Law, Judge, Receive, Intent