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

The difference between a voluntary and involuntary bankruptcy filing in Maryland is the fact that a voluntary filing is done by the debtor, while an involuntary filing is done by creditors. A voluntary bankruptcy is typically done when a debtor cannot pay their debts or when they want to restructure their debt. This filing is known as a Chapter 7 bankruptcy and will involve the debtor surrendering certain assets to the bankruptcy court in order to pay off debt. In contrast, an involuntary bankruptcy is when creditors file for bankruptcy against a debtor who is unable to pay their debts. This is known as a Chapter 11 bankruptcy and allows creditors to receive debt payments from the debtor. As with a voluntary bankruptcy, the debtor may be required to surrender certain assets to the bankruptcy court in order to make their debt payments. In either situation, bankruptcy proceedings can be very complex, and it is highly recommended for those considering voluntary or involuntary bankruptcy in Maryland to seek legal advice and counsel before filing.

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

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