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.
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.
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.