A 'debtor' (DETT-er) is defined as 'a person or company that owes money, goods, or services to a creditor.' Under the federal bankruptcy code, a debtor may wind up in bankruptcy either voluntarily or involuntarily. Voluntary debtors are those who have taken the initiative to file a voluntary petition with the bankruptcy court. Voluntary bankruptcy may be filed by an individual, a partnership, and most corporations. Those that may not file include such entities as railroads, banks, savings and loans, insurance companies, credit unions, and municipalities. Under certain bankruptcy provisions, an individual or company may be placed in involuntary bankruptcy by creditors. The creditors must prove that the debts of the individual or business exceed a certain amount, and the debtor can't pay what is owed. There are certain rules about how many creditors must petition for involuntary bankruptcy, and how they must do it. For information on being a debtor as it relates to bankruptcy, contact a bankruptcy attorney.
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