Chapter 11 Timeline and Process

The Chapter 11 timeline and Chapter 11 reorganization bankruptcy process for filing bankruptcy includes choosing an attorney, filing the paperwork, and waiting for the debts to be discharged by the court. Chapter Eleven bankruptcy is commonly referred to as reorganization bankruptcy because the company filing the petition must also file a plan for reorganization with their petition to their Chapter 11 bankruptcy creditors. Filing for Chapter 11 bankruptcy is a lengthy and pricey process to deal with for individuals or corporations if they do not enlist the help of an experienced bankruptcy attorney. Most debtors in a Chapter 11 bankruptcy case not only have to pay their own legal fees but also the legal fees of their creditors along with the required filing fee and miscellaneous administrative fee charged by the court at the time of filing.

Consulting a Bankruptcy Lawyer

The first and possibly most important part of the Chapter 11 timeline is to consult with and hire a competent, experienced bankruptcy attorney before anything else is completed. Choosing an attorney is an extremely important step because if the wrong one is chosen then the process can be completed incorrectly, causing the debtor to begin the filing process all over again. The perfect Chapter 11 attorney for a bankruptcy case is one that has worked in the industry for quite a few years and has represented large corporations with these types of cases. The attorney will represent the client when they are due to appear in court and when they must meet with their creditors. The attorney will also help fill out all of the required paperwork as well as make sure that all of it is followed by the required deadlines when they are filing chapter 11.

Credit Counseling Prior to Filing

Once an attorney has been hired, the debtor must attend credit counseling if they wish to file for Chapter 11 bankruptcy as defined by the United States Bankruptcy Code. If the debtor does not attend credit counseling from an approved credit-counseling agency then they will not be permitted to file for bankruptcy under federal and state laws. Credit counseling is a set of courses that educate the debtor on financial issues such as managing accounts, paying credit card bills, managing payments, avoiding debt, reconsolidating debt and many more topics. By taking credit counseling courses the debtor might learn a new way to deal with debt and the rest of their finances, persuading the debtor from filing for bankruptcy.

Meeting of the Creditors

The next step in the Chapter 11 timeline is to have a meeting with the creditors. This is a mandatory meeting for the debtor to attend but not for the creditors to attend. If the creditors do not show up, the meeting will still take place because it is presided over by the trustee assigned to the case. This meeting typically is schedule for 30 days following the filing date of the petition. The meeting of the creditors is nicknamed the “341 meeting” after the section of the Bankruptcy Code that requires the meeting to take place. The trustee will ask the debtor questions regarding the bankruptcy filing, about the debtor’s assets, and about the debtor’s liabilities while being under oath. The purpose of the meeting is to act as a fact finding mission for both the trustee and the creditors involved. Neither the creditors nor the trustee can make any decisions regarding the case once the meeting is complete.

Discharge of Debts

The final step in the Chapter 11 timeline is the discharge of the debts. The discharge of the debts is when the debtor has all of their debts removed from their records and accounts by the court presiding over the case. The debtor will be notified of the discharge of the debts via a letter that comes in the mail. If the debts are not discharged, which means the petition for bankruptcy has been denied, a letter will also be sent to the debtor detailing their rejection.

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