Understanding Chapter 11 Bankruptcy Process & Timeline by Jacksonville, Florida Lawyer
Chapter 11 Bankruptcy gives debtors (commonly businesses) the opportunity to formulate a restructured payment plan to satisfy outstanding debts, with the supervision of a bankruptcy court. Like a Chapter 13 plan, Chapter 11 bankruptcy Florida is a multi-stage and lengthy process that can be overwhelming without proper counsel from a Jacksonville Bankruptcy lawyer. It is important to understand the different stages that this process entails and be certain The Law Offices of Justin McMurray is here to help you with your Chapter 11 filing. While every case is unique, here is a general timeline to help guide you on what to expect in a typical Florida Chapter 11 bankruptcy:
- 180 days prior to filing – This period should be dedicated to credit counseling and learning about the ins and outs of a Chapter 11 plan. Competing a credit counseling course is needed to satisfy eligibility requirements. As per the U.S. Bankruptcy code, counseling must be received within 180 days prior to the filing of the petition and must be administered by a duly approved agency.
- Day 1 – The process officially begins when your attorney submits your petition to court. With it, your attorney must also submit a list of creditors and other requisite forms. A filing fee must also be paid. At this stage of the process, an automatic stay takes effect, putting a halt on collection taking and other legal actions taken against you. 48 hours after the petition is filed, a first day hearing takes place to discuss and consider related motions and how the process and activities are going to proceed.
- Approximately 14 days after petition – The official creditor's committee is formed by the Office of the U.S. trustee. This committee is comprised of some of the debtor's creditors and they are responsible for making decisions on behalf of all creditors involved.
- Approximately 30 to 60 days after petition – The 341 meeting (meeting of creditors) is held. This is where the creditors and the debtor convene for questioning regarding income, property, outstanding debts, and related issues that may help or affect the case.
- Approximately 120 days or more after petition – The reorganization plan is developed. One of the most important components of a Florida Chapter 11 bankruptcy plan, the reorganization plan describes how a business intends to restructure and repay its debts. This plan is developed and submitted for consideration by the creditors. Once approved, the case can then proceed to the confirmation stage.
- Approximately 14 days after final plan is approved – Confirmation of the plan is made and existing debts excluded from the said plan are discharged. The debtor is bound by the terms and agreements of the reorganization plan from this point forward.