Petition in Bankruptcy

Petition in Bankruptcy

A document filed in a specialized federal court to commence a proceeding to provide a means by which a debtor who is unwilling or financially unable to pay personal debts will satisfy the claims of his or her creditors as they come due.

There are two types of petitions in Bankruptcy cases. A voluntary petition is filed by a debtor who wants to make arrangements for the payment of debts and be relieved of liability for them. An involuntary petition is filed by a statutorily prescribed number of creditors whose aggregate sum of claims exceed a specific amount.

A petition in bankruptcy lists the debtor's assets, liabilities, and debts so that a realistic arrangement for the payment of creditors can be devised.

References in classic literature ?
It was with greater satisfaction that they welcomed his success, since Perkins and Cooper had fallen upon evil days: Cooper drank like a fish, and just before Tom Perkins took his degree the linendrapers filed their petition in bankruptcy.
The Board voted to refer this matter to a committee of the independent directors to consider whether it would be appropriate to file a petition in bankruptcy.
Subsequently, the Board of Natural Solutions Corporation met on March 22, 2002 and voted to accept the recommendation of the committee of independent directors and instructed the management of the Company to take the necessary steps to file a petition in bankruptcy on behalf of the Company as soon as possible.