What is Chapter 11 Bankruptcy?
Chapter 11 Bankruptcy proceedings are reorganization plans intended for large corporations, small businesses, and—in a few rare cases—qualified individuals. Your business will continue to operate during the restructuring or reorganization phase of a Chapter 11 Bankruptcy proceeding. Once a Chapter 11 Plan is confirmed, the case can be closed, and the newly restructured business moves forward with a new lease on life.
How long can I stay in Chapter 11 Bankruptcy?
Chapter 11 does not have a cap on the number of years it can be in place. Depending on the circumstances, a Chapter 11 plan can last from 5 years to 30 years. It depends on the amount of secured debts, the votes of creditors of a proposed plan, what property the business needs to retain and pay for, and other factors. However, once the Chapter 11 plan is confirmed, the case can be administratively closed. When the plan is completed, the case is reopened, and the final order is entered.
What happens when a company files for Chapter 11 Bankruptcy?
Chapter 11 Bankruptcy proceedings are commonly known as restructuring or reorganization plans. Typically used by corporations and large companies, Chapter 11 allows the filing business to stay open and operational while they restructure their assets and debts. This allows the organization to repay their creditors over time. This represents a contrast to Chapter 7 Bankruptcy, in which company assets are sold to pay creditors.
Does filing for Chapter 11 mean that my creditors must stop contacting me?
Yes, once you file the Bankruptcy petition, an automatic stay goes into effect. This prohibits creditors/collectors from any attempt to collect on the debts. For example, the automatic stay temporarily prohibits creditors from requesting payments, stops evictions/foreclosure proceedings, halts bank levies, etc.
Who is eligible to file for Chapter 11 Bankruptcy?
In some cases, individuals are eligible to file for Chapter 11, but most Chapter 11 debtors are businesses. Small and large businesses alike are eligible to file for Chapter 11. You may be a good candidate for Chapter 11 if you are facing significant debts and you have a viable business that you wish to protect and which can be realistically preserved with some temporary relief. Our Arkansas Chapter 11 attorneys can help you understand your various options and determine if filing for Chapter 11 Bankruptcy may be the right option for you.
How long do I have to file a reorganization plan?
The reorganization plan is a complex document that restructures your financial affairs, including your debts. Your attorney can help prepare and file this document on your behalf.
Outside of certain extraneous circumstances, most Chapter 11 debtors have 120 days from the date of filing for Bankruptcy to propose a reorganization plan (this is known as the exclusivity period). Often, debtors utilize the majority of or the full 120 days to put together the reorganization plan and file it with the court. In some cases, you may be able to request a motion to extend the timeline for filing the reorganization plan. However, once the exclusivity period has passed, the creditors’ committee or other interested parties may propose their own reorganization plan(s). More often, when creditors or other interested parties are not happy with the debtor’s progress, they will request that the case be dismissed or be converted to a Chapter 7 Bankruptcy case.
Why should I hire Caddell Reynolds Law Firm?
When your business is at stake, it is critical that you work with a legal team that understands the Bankruptcy filing process. Since 1989, Caddell Reynolds Law Firm has been effectively representing businesses of all sizes in Chapter 11 and related Bankruptcy proceedings. Our Arkansas Chapter 11 Bankruptcy attorneys understand what is at stake, as well as what options are available to protect you, your business, and your future.
We provide personal attention and support throughout the process. Our team is available 24/7, and we always take the time to update our clients on their cases. With over 100 years of combined experience, we have what it takes to represent you and your best interests.