What is Involuntary Bankruptcy?
Consumers who are struggling with debt but do not want to file for bankruptcy may, in certain situations, end up facing an involuntary bankruptcy petition. While involuntary bankruptcy is much more common when businesses owe debts to creditors, there are situations in which creditors can file an involuntary bankruptcy petition against an individual debtor. In most situations, individual consumers do not need to be worried about facing an involuntary bankruptcy case. However, it is important to understand the kinds of scenarios in which the U.S. Bankruptcy Code allows a creditor (or a group of creditors) to file an involuntary bankruptcy petition against an individual debtor. Learning More About Involuntary Bankruptcy Before we discuss some of the situations in which creditors can and cannot file an involuntary bankruptcy petition against an individual debtor, we want to tell you more about involuntary bankruptcy. In general, there are voluntary and involuntary bankruptcy proceedi...