voluntary bankruptcy

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Voluntary bankruptcy

The process where the debtor petitions the court for bankruptcy protection. Also see Involuntary bankruptcy.

Voluntary Bankruptcy

A situation in which a debtor files for bankruptcy with a court. That is, no creditor forces the debtor into voluntary bankruptcy. A debtor may file for bankruptcy if it finds repaying its debts difficult or impossible. There are different kinds of voluntary bankruptcy. A company may file for liquidation, where a company ceases operations and sells its assets to repay creditors as far as possible. Likewise, a company may file a reorganization plan where some or all debts are forgiven and the company puts itself on a path toward solvency. See also: Chapter 7, Chapter 11, Chapter 13.

voluntary bankruptcy

A bankruptcy initiated by the organization entering the bankruptcy rather than by that organization's creditors. Organizations generally enter voluntary bankruptcy to protect themselves from creditors' claims. Compare involuntary bankruptcy. See also Chapter 7, Chapter 11.
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While consumer finance companies' aggressive lending at high interest rates is blamed for a steep increase in voluntary bankruptcies among individual debtors, Takefuji President Masato Ikeda brushed aside the criticism, saying the companies are contributing to society as most of their clients cannot borrow from banks amid the continued credit crunch.
Nevertheless, the number of voluntary bankruptcies among Takefuji's customers increased 1.

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