What initiates the process of bankruptcy proceedings?

The initiation of bankruptcy proceedings is officially marked by the bankruptcy order being passed. This order, which must be granted by a court, legally recognizes an individual's or entity's inability to pay debts and sets the formal process of bankruptcy in motion.

While a petition may be filed online, it is the subsequent court proceedings and the eventual granting of a bankruptcy order that legally starts the bankruptcy process. The appointment of a trustee occurs after the bankruptcy order is in place, as their role is to manage the bankrupt estate and operate under the authority granted by the bankruptcy order. Similarly, a creditor filing a claim may lead to bankruptcy proceedings, but it does not initiate them; rather, it can act as a trigger for a debtor to file or for creditors to seek a bankruptcy order themselves. Thus, the correct understanding of the initiation of bankruptcy relies fundamentally on the granting of the bankruptcy order.