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HANDLING INVOLUNTARY BANKRUPTCIES: TOP TWENTY TIPS FOR

Are most bankruptcies voluntary or involuntary?
A voluntary bankruptcy is the most common type of bankruptcy proceeding.
It is initiated by a debtor who wishes to seek relief from their debt burden.
Involuntary bankruptcies are very rare.
They are initiated by creditors who want to receive payment for what they are owed from a debtor.
Who gets paid first in Chapter 11?
Secured creditors are first in line, as their claims over assets are often secured by collateral and a contract.
Some assets may have multiple liens placed upon them; in these cases, the first lien has priority over the second lien.
What is Chapter 11 ban?
A Chapter 11 bankruptcy allows a company to stay in business and restructure its obligations.
If a company filing for Chapter 11 opts to propose a reorganization plan, it must be in the best interest of the creditors.
If the debtor does not put forth a plan, the creditors may propose one instead.
In a Chapter 7 bankruptcy, most of your assets will be sold off to pay your creditors.
In a Chapter 13 bankruptcy, you get to keep more of your assets but must repay your creditors in three to five years.
Chapter 7 will remain on your credit report for up to 10 years, while Chapter 13 will remain for up to seven years.

Are most bankruptcies voluntary or involuntary?