Even if a firm's cash flow projections indicate that it will soon be unable to meet its interest payments, a bankruptcy case cannot begin until the firm actually defaults on a scheduled payment.

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A bankruptcy case can be initiated by creditors even if the firm has not yet defaulted on a payment, as long as the firm is considered insolvent (unable to pay its debts as they come due).

Even If a Firm's Cash Flow Projections Indicate That It