Bankruptcy Timeline - Filing Chapter 11 Bankruptcy
Under Chapter 11 the debtor will be required to submit a plan of reorganization within 120 days of the commencement of the bankruptcy case.
Such a plan will provide for the repayment of loans secured to be paid over five to ten years period of time.
The interest rate on such loans may be adjusted at a market rate following confirmation of the plan.
In most proposed plans, the unsecured creditors end up being paid less than the full amount of their claims.
Chapter 11 plan classifies claims against the debtor, identifies action to be given each class of claim, and provides the ways for carrying out the plan.
The plan has to be confirmed by the bankruptcy court.
For confirmation of a plan under Chapter 11: 1.
The plan must originate from the debtor 2.
The debtor require creditors to accept the plan 3.
The confirmation hearing must be held to either confirm or not confirm the said plan For confirmation, however, the plan must be accepted by at least one class of impaired claims.
Basically, these are creditors' claims that will not be paid in full amount or whose legal rights are adjusted by the plan.
Most importantly, the bankruptcy court must ensure that the plan is feasible.
Discharge Upon confirmation of the plan by the court, Chapter 11 discharges all its debts.
The debtor redeems back all his property and both the debtor and the creditors are bound by the terms of the confirmed plan.
The Bankruptcy Code rules and legal issues involving confirmation of a Chapter 11 plan are extremely complex and technical.
Therefore, no business managers and partners should consider and attempt a Chapter 11 bankruptcy without competent and qualified legal and financial advice.
Such a plan will provide for the repayment of loans secured to be paid over five to ten years period of time.
The interest rate on such loans may be adjusted at a market rate following confirmation of the plan.
In most proposed plans, the unsecured creditors end up being paid less than the full amount of their claims.
Chapter 11 plan classifies claims against the debtor, identifies action to be given each class of claim, and provides the ways for carrying out the plan.
The plan has to be confirmed by the bankruptcy court.
For confirmation of a plan under Chapter 11: 1.
The plan must originate from the debtor 2.
The debtor require creditors to accept the plan 3.
The confirmation hearing must be held to either confirm or not confirm the said plan For confirmation, however, the plan must be accepted by at least one class of impaired claims.
Basically, these are creditors' claims that will not be paid in full amount or whose legal rights are adjusted by the plan.
Most importantly, the bankruptcy court must ensure that the plan is feasible.
Discharge Upon confirmation of the plan by the court, Chapter 11 discharges all its debts.
The debtor redeems back all his property and both the debtor and the creditors are bound by the terms of the confirmed plan.
The Bankruptcy Code rules and legal issues involving confirmation of a Chapter 11 plan are extremely complex and technical.
Therefore, no business managers and partners should consider and attempt a Chapter 11 bankruptcy without competent and qualified legal and financial advice.
