Chapter 11 Bankruptcy Process | FilingForBankruptcyOnline.com

The Chapter 11 bankruptcy process is one that is typically used by corporations or other types of companies. A chapter 11 bankruptcy is similar to a chapter 13 bankruptcy in that it is intended as a restructuring; allowing a corporation to continue to operate and repay its debts as it can while settling debts which have grown beyond its ability to control them. Chapter 11 bankruptcy, like all bankruptcy proceedings, has a specific process that must be followed by the debtor and the courts in order to successfully bring the bankruptcy to a close. A chapter 11 bankruptcy follows certain steps, and the end result is that the company will be able to survive and its creditors will receive some or all of what they are due.

Understanding the Chapter 11 Bankruptcy Process

In order to begin a Chapter 11 bankruptcy, a business must file a bankruptcy petition with the US bankruptcy court in its jurisdiction.
After doing so, the organization or business has a period of 120 days in which to file a reorganization plan, which is a document stating how they plan to modify their business in order to remain functional and pay back debts and successfully recover from the bankruptcy.
Along with this petition, the organization must provide sufficient information to its creditors so that they can evaluate this plan and determine whether or not they feel it is a viable option or whether they wish to try to force a total bankruptcy on the company.

Once the court has approved the application for Chapter 11 bankruptcy, and if no objections are made by the creditors of the organization, a trustee is appointed and the court begins to determine which debts should be repaid and which debts will be discharged. The debtor corporation has the ability to remove itself from unfavorable leases, consolidate its business, and do everything in its power to reorganize the business so that it can successfully continue to do business during the bankruptcy, and hopefully also rebound as a reorganized business model after the bankruptcy proceedings are complete.

Chapter 11 bankruptcies are usually carried out over a period of three to five years, during which the trustee will monitor the organization’s progress towards the goal, and will report back to the court as to whether or not the reorganization plan is being met and the agreed-upon steps are being taken to make the company viable again. Afterwards, the company can emerge with a lower debt load and a better financial future.

Getting Help

If your business is facing Chapter 11, the advice of an experienced bankruptcy attorney can be invaluable in helping to ensure you get all your debts taken care of. Your attorney can assist you throughout every step of the Chapter 11 bankruptcy process so the case is able to move smoothly through the courts.

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