Order for Relief

Category: legal

The official judicial finding that triggers the application of bankruptcy laws to the debtor’s situation.

The order for relief is the "official start." In voluntary cases, simply handing the petition to the clerk automatically constitutes the order for relief. In an involuntary bankruptcy (where creditors try to force a company into bankruptcy), a judge must issue the order after a trial.

Common Examples

• The entry of the order for relief immediately activated the automatic stay, halting all pending state court litigation against the firm.
• The creditors succeeded in their involuntary petition, prompting the judge to issue the formal order for relief and appoint a trustee.