If an outside party files a bankruptcy petition on a firm that owes the outside party a debt,then that is called

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When an outside party files a bankruptcy petition on a firm that owes them a debt, it is an involuntary filing. This means that the firm did not choose to file for bankruptcy themselves, but rather it was forced upon them by the actions of the outside party. An involuntary reorganization is one possible outcome of such a filing, but it is not the only option.

If an Outside Party Files a Bankruptcy Petition on a Firm