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

Voluntary bankruptcy filing is when an individual or business decides to file for bankruptcy because they cannot repay their existing debt. This type of bankruptcy filing allows the debtor to delay or eliminate payment of their debt. Involuntary bankruptcy filing, on the other hand, is when a creditor files a bankruptcy petition against a debtor and requests that the court legally order the debtor to repay the debt. This type of filing is usually used when a debtor has not been able to negotiate payment with the creditor and the creditor fears they will not receive payment. In Rhode Island, there are certain requirements for either type of bankruptcy filing. For voluntary bankruptcy, the debtor must file an official bankruptcy petition, have a credit counseling course and submit all relevant financial information. For involuntary bankruptcy, the creditor must provide a sworn statement attesting the debt is owed, a list of other creditors involved and supporting documentation of the debt. Voluntary and involuntary bankruptcy filings are two types of bankruptcy available to individuals or businesses in Rhode Island. In the case of voluntary bankruptcy, the debtor is the one filing the petition. Involuntary bankruptcy filing, on the other hand, is when a creditor files a petition against the debtor. Both types of filing require the debtor to fulfill certain requirements in order to be eligible.

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

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