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

The primary difference between a voluntary and involuntary bankruptcy filing is the party initiating the process. With a voluntary filing, the debtor (the person or business owing money) files the bankruptcy paperwork with the court. This means that the debtor has chosen to pursue bankruptcy as an option to deal with their debt. On the other hand, an involuntary bankruptcy filing is initiated by creditors, not the debtor. In South Carolina, creditors can file for involuntary bankruptcy if the debtor owes at least $17,250. If the creditors have this amount, they can file a petition in the Bankruptcy Court. The court may grant the creditors’ petition if the debtor is not paying their debt and does not have a payment plan in place. In some cases, involuntary bankruptcy may be the best option for creditors because it ensures that they will be paid. It also allows the court to step in and settle disputes between the debtor and their creditors. However, this type of filing is also very difficult for the debtor to recover from since the creditors have control of the process. In summary, voluntary bankruptcy filings are initiated by the debtor, while involuntary filings are initiated by the creditors. The differences between the two involve who initiates the process and the outcome. Both types of bankruptcy filings come with their own pros and cons, so it’s important to consult a bankruptcy lawyer before making any final decisions.

Related FAQs

What will happen to my creditors if I file for bankruptcy?
Can I file for bankruptcy to stop creditor harassment?
What documents will I need to file for bankruptcy?
Are there any types of debt that will survive a bankruptcy discharge?
How does filing for bankruptcy affect my retirement benefits?
Can I keep my home when filing for bankruptcy?
How often can I file for bankruptcy?
How do I know if I qualify for a repayment plan?
What type of information will I need to provide to my attorney before filing for bankruptcy?
Will filing for bankruptcy stop repossession?

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

Related FAQs

Related Blog Posts