Hiring a bankruptcy attorney ensures you get a clear understanding of your financial status and your options. Taking care of your financial difficulties is the first step one can take towards financial recovery. One of the first things to do before filing for bankruptcies is to learn about all types of bankruptcies. You can also research and read bankruptcy articles to get the information you need when taking this step to a long-term solution to your financial woes. Differentiating bad credit vs bankruptcy will help you understand if you need to work on your bad credit or look for a bankruptcy attorney.
Facing bankruptcy may be stressful and overwhelming, especially if you lack the proper legal aid. You need to hire a bankruptcy attorney to guide you through the process and help you file for bankruptcy. For instance, if you are filing for Chapter 11 bankruptcy, look for chapter 11 bankruptcy attorneys, then choose the best. It is vital to meet a bankruptcy lawyer for an initial consultation before they start working on your case. Ask all the questions you may have about active bankruptcies and the process of filing for bankruptcy.
For companies, small businesses, individual business ventures and other organizations, Chapter 11 bankruptcy is the ideal way to seek debt restructuring and get bankruptcy protection. If the company’s debts have grown to be unmanageable, Chapter 11 bankruptcy helps them start over and recover from this debt. In 2013 alone, 8,980 different Chapter 11 bankruptcies were filed in the U.S. by companies seeking a court-mandated debt repayment plan.
But how long does Chapter 11 bankruptcy last? Wondering about the Chapter 11 bankruptcy timeline and all its consequences is completely normal, which is why we’ve provided this step-by-step look at how the typical Chapter 11 bankruptcy plays out:
Step 1: Undergoing credit counseling
Before an individual can be considered eligible to file for Chapter 11 bankruptcy by the courts, he or she is required to attend a credit counseling agency-approved credit counseling session within 180 days of filing for bankruptcy. While it’s rare, individuals may file Chapter 11 bankruptcy if they are the sole proprietors or owners of their business. Credit counseling is designed to educate individuals on the consequences and realities of filing for bankruptcy to inform their decision.
Step 2: Filing for Chapter 11 bankruptcy
Once credit counseling has been completed, it’s time to file for bankruptcy. With the Chapter 11 bankruptcy petition, the filer will also need to provide a list of the company’s creditors along with the filing fee. After this, the company’s creditors will be required to meet with the bankruptcy court to determine the outcome of the bankruptcy for the debtors. These meetings can take anywhere from 30 to 60 days after the bankruptcy is actually filed.
Step 3: Creation of a debt reorganization plan
Once the debtor’s creditors have agreed with the bankruptcy court to allow the bankruptcy to take place, the creditors and the court will work with the debtor to set up a repayment plan that fits the company or business’ budget. This step typically takes place around 120 days after the bankruptcy filing
Step 4: Confirmation, discharge and beginning of repayment
After the repayment plan has been established, the debtor will formally agree to all of its terms and conditions, effectively beginning the repayment process and ending the Chapter 11 bankruptcy timeline; this typically takes place two weeks after the repayment plan has been created. The time it takes to repay all debts depends heavily on the debtor’s financial situation and the planned repayment schedule set up during the bankruptcy.
Have any other questions about the Chapter 11 bankruptcy timeline, the difference between Chapter 7 and 11, what is Chapter 11 bankruptcy specifically or anything else? Feel free to ask — just leave a comment below. Read more about this topic at this link.