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

The main difference between a voluntary and involuntary bankruptcy filing is who initiates the process. Voluntary bankruptcy is requested by the individual or entity filing for bankruptcy, while involuntary bankruptcy is requested by a creditor who is owed money by the individual or entity. In Virginia, a voluntary bankruptcy filing is initiated with a petition that is sent to the bankruptcy court. The petition includes information about the filer’s assets, debts, and income. Once the court has approved the petition, the filer must then submit a repayment plan. This plan outlines how the filer will repay some or all of their debts. In contrast, an involuntary bankruptcy occurs when a creditor files a petition on behalf of an individual or entity. The creditor must present evidence that the debtor is unable or unwilling to pay the debt they owe. If the court agrees, the debtor must then submit a repayment plan to the court. This repayment plan outlines how the debtor will repay their creditors. Ultimately, the main distinction between a voluntary and involuntary bankruptcy filing is who initiates the process. A voluntary bankruptcy is filed by the individual or entity in debt, while an involuntary bankruptcy is filed by the creditor. Both involve the submission of a repayment plan to the court, but it is up to the court to decide whether or not to approve the repayment plan in either case.

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

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