All about Chapter 11 Bankruptcy

One of the most common types of bankruptcy filed by people involved in corporations or partnerships is Chapter 11 bankruptcy. This type of bankruptcy usually takes up to 120 days before the process of filing is finished. The first day of filing Chapter 11 involves submitting a petition. In this process, the debtor will actually be required to submit a petition to the respective court clerk in the chosen bankruptcy court. This petition usually involves the list of all creditors. Vital information of the creditors, such as their names, addresses, and their account information is also required. This is a legal requirement that must always be met, in order to file this type of bankruptcy. In addition to the creditors list, the debtor would also be required to submit the 20 largest claims that were unsecured, if this case applies. The purpose of this is to secure the funds and all of the necessary appointments that will be used in the process of filing. The appointment of a trustee would also be done in this first day. Usually, trustees would include a certified public accountant, or a competent debt counselor.

15 days after filing Chapter 11 bankruptcy, the debtor is usually required to submit a specific statement. This statement would include all of the necessary financial statements by the debtor, which includes all of the assets and the liabilities, and, all of the expenditures and revenues. This list would be used for the court to see what are the properties and the assets which are exempt and non exempt, as well as the list of the co debtors involved in this case. Given all of these processes, it is highly recommended for debtors to get the best bankruptcy attorneys that they can find. Unexpired contracts and leases, as well as all kinds of claims are also investigated.

After this, the next step would involve holding a meeting of all of the creditors and other parties involved in the case. This meeting is also commonly called as the 341 meeting. The purpose of this meeting is for the court to hear all of the cases and the arguments that will be presented by all of the creditors. Such information is essential for the proceedings of the court to push through. After all of the arguments is heard, this would then be answered by the representative of the debtor in the case, which is the bankruptcy attorney. Soon after this meeting, it is expected that the proceedings would gain significant developments. This process usually occurs thirty days into the case.

The next step would involve solving all the issues in the bankruptcy case. After all of the court related cases is already resolved, the debtor would then be required to propose to the creditors a reorganization plan, including how are the issues regarding the assets would be resolved. The trustee would also be asked on the best way for the lost assets to be recovered. The debtor in this case has the responsibility to convince the creditors to accept the reorganization plan.