The Chapter 11 financial plan is more than just a promise to repay creditors. If it was that simple, you could just pick up the phone, call each creditor, and tell them their payment is in the pipeline. With a Chapter 11 bankruptcy, you are essentially restructuring your business in a way that will allow you to manage repayments while the business remains in operation.
How the business is restructured will largely depend on the circumstances that led to the filing of the Chapter 11 bankruptcy. In all cases, the bankruptcy court is in control of approving a payment plan. In some cases, the bankruptcy court may appoint a trustee to oversee operations, if there is sufficient cause.
You will usually have four months after filing Chapter 11 to propose your reorganization plan, which is called the exclusivity period. This period may be extended up to 18 months, provided the court finds good cause on the part of the debtor. Once outside of the exclusivity period, creditors and other relevant parties have the opportunity to propose financial or reorganization plans for the business. This timeframe may be different if you are considered a small business case.
A Chapter 11 gives the debtor breathing room to create a financial and restructuring plan. This process results in a contract between the debtor and creditors that defines how the company is run and outlines how it intends to pay creditors going forward.
Overall, a Chapter 11 bankruptcy is typically a complete reorganization of a company and its assets. The process is often complex and may result in significant changes to how the business is run.
Chapter 11 Lawyer
Depending on the size of your company and the financial problems it is facing, a Chapter 11 bankruptcy may take a long time to complete. There is no set limit on the length of time a Chapter 11 may last, either. Debtors should consider all available options before filing for bankruptcy. For small business owners who have business debts secured in their own name, filing for Chapter 7 or Chapter 13 bankruptcy may be a better option.
The lawyers at H. Lehman Franklin P.C. can help you assess your goals and choose the right option for you and your business. We have an experienced team of legal professionals who are well versed in bankruptcy law and debt relief. Many Georgia businesses have survived financial hardship by filing for Chapter 11 bankruptcy with a strong financial restructuring plan and the support of H. Lehman Franklin P.C.
Call our offices today at 912-764-9616 or email us at firstname.lastname@example.org to learn more about the pros and cons of filing for Chapter 11 bankruptcy, based on the specific circumstances of your organization and finances.