What is the difference between a voluntary and involuntary bankruptcy filing?

Voluntary and involuntary bankruptcies are both forms of bankruptcy filing that are available under Delaware bankruptcy law. While both types of filing have the same end result (the debtor’s assets being distributed among creditors to pay off debts), the way in which the filing is initiated is very different. A voluntary bankruptcy is when the debtor chooses to file for bankruptcy. It is initiated either by the debtor or by one or more of the debtor’s creditors. The debtor usually files a petition with the court voluntary stating that they cannot pay back their debts and thus need protection from creditors. An involuntary bankruptcy is usually when the debtor’s creditors are the ones to initiate the filing. This is done by filing a petition with the court, usually if the debtor is unable to pay back debts and the creditors are seeking to regain some of the money they are owed. In addition, if the debtor has willfully refused to pay debts owed to the creditors then the creditors can also initiate an involuntary bankruptcy. In summary, the main difference between a voluntary and involuntary bankruptcy filing is who initiates the process. In a voluntary filing, the debtor initiates the filing, whereas in an involuntary filing, the debtor’s creditors initiate the process.

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What is the difference between a voluntary and involuntary bankruptcy filing?

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