voluntary bankruptcy

Voluntary bankruptcy occurs when an individual or business chooses to file for bankruptcy protection proactively, typically because they recognize they cannot pay their debts. By doing so, they seek to reorganize or eliminate debts under court supervision, gaining relief from creditor collection efforts. This decision often reflects a strategic move to manage financial difficulties responsibly, providing a structured process to resolve debts fairly for both the debtor and creditors. It’s a legal tool designed to give debtors a fresh start or to facilitate the fair distribution of assets among creditors.