How to File for Chapter 11 Bankruptcy
Filing Chapter 11 Bankruptcy in Jacksonville, Florida
Often referred to as a ‘reorganization,’ a Chapter 11 bankruptcy is a form of bankruptcy protection primarily used by businesses that can no longer pay their debts off. This type of bankruptcy allows businesses to restructure their debts under court supervision so that they can continue to satisfy creditors through a repayment plan. In a Chapter 11 bankruptcy in Florida, a reorganization plan allows for a revised and reduced payment scheme and schedule so the terms can meet the debtor’s financial ability. The Law Offices of Justin McMurray, P.A. can help you prepare bankruptcy petitions, helping you protect your interests through every step of the process.
- In Florida, the Chapter 11 bankruptcy process begins with the filing of a petition with the local bankruptcy court. A petition can be filed once the debtor determines inability to pay off current debts. However, there are some cases when an involuntary petition is filed and that mandates bankruptcy is filed by creditors. In any case, the debtor is entitled to an automatic stay once the petition is filed.
- After the petition has been filed with the court, the debtor maintains control over the assets or the business as a debtor-in-possession, a title you will hold throughout the reorganization process. As a debtor-in-possession, you are expected to undertake certain legal functions like filing reports with the court, responding to creditor claims, and other processes.
- A trustee is also assigned for a Chapter 11 Florida bankruptcy case. However, unlike in other forms of bankruptcy, their role is only to monitor the activities of the debtor-on-possession, instead of taking control of assets.
- After filing the petition, a reorganization plan must be submitted to court within 120 days of the first filing. At this point, creditors will review and evaluate the plan to determine suitability. Creditors have the opportunity to design and submit their own plan for consideration should the original plan lack substance or fail to meet the requirements. Once in agreement, the court can then confirm and finalize the plan.
- Once a Florida Chapter 11 bankruptcy plan is finalized, the court can then discharge debts that will not be included in the repayment plans. The debtor then assumes no responsibility for the discharged debts—meaning they can never be collected on them by the creditors. After the discharge, the repayment plan becomes active and the debtor is required to pay according to the agreed upon terms of the plan.
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