How to File Chapter 11

Chapter 11 bankruptcy is commonly known as a reorganization bankruptcy because it involves businesses and corporations that typically have to reorganize all their debts and assets in order to stay afloat. When filing for Chapter 11 the company must provide the court in their area of location a written disclosure statement and the company’s plan of reorganization. If one or both of these documents are not filed with the court then the petition for claiming bankruptcy will be denied by the court.

Chapter 11 Eligibility

Eligibility requirements for a company or a corporation filing for Chapter 11 bankruptcy must be met prior to the filing process can even begin. The company cannot have had a prior petition for bankruptcy dismissed by the court for a failure to appear within the last 180 days of filing a new petition with the court is the first requirement that must be met. The second requirement that must be met is that the company must have attended credit counseling at least 180 days prior to filing their Chapter 11 petition with the court. Once it has been determined that the corporation or the business is eligible to file for Chapter 11 then the rest of the process can begin.

Consulting a Bankruptcy Attorney

Before any paperwork is filed with the court the company should consult a bankruptcy attorney to discuss their options and their financial situation. The first consultation with the attorney should include a lot of talking by the client and a lot of listening and note taking by the attorney. The client should explain the company’s entire situation to the attorney so the attorney knows what situation the company is in and the options it might have that are alternatives to filing for bankruptcy. An experienced and well-rounded attorney will offer alternatives to bankruptcy and not just pressure their client into filing for bankruptcy right away. The attorney will also represent the client during their court hearings and when the company meets with their creditors, negotiate their debt any other financial problems.

Filing a Petition with the Bankruptcy Court

Collecting all of the paperwork needed for the filing process can be lengthy and difficult as well as overwhelming. There is a lot of paperwork that must be collected and filed with the court and it all starts with the petition for bankruptcy. The petition must include the name of the debtor, the debtor’s social security number or tax identification number, the location of the company, the debtor’s plan to file a reorganization plan and a request for relief under the Bankruptcy Code.

Other paperwork that must be collected and filed with the court includes a written disclosure statement. The written disclosure statement should include information about the company’s assets, liabilities, and business affairs. This information must be enough to prove to a creditor that the company is working towards a reorganization plan. The petition that is to be filed with the court should also include schedules of assets and liabilities of the company, a schedule of current income and expenditures of the company, a schedule of executor contracts and unexpired leases of the company and a statement of financial affairs.

When filing the paperwork with the court, the debtor and the lawyer should file everything at once to make the process easier for all parties involved. Two fees must be paid to the court at the time of filing as well. The first fee is a $1,000 filing fee and the second fee is a $39 miscellaneous administrative fee. If the company cannot pay the filing fee upfront, the Bankruptcy Code allows the company to pay the fee in four installments that must end no later than120 days from the date of the petition being filed. The same can be done with the administrative fee. If the bankruptcy is being filed jointly then only one filing fee and one administrative fee will be charged.

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