If you are a business owner who is considering filing for bankruptcy, it is common to have questions or concerns about the process. The following are some the most important things to understand while navigating the business bankruptcy process, commonly Chapter 11. An experienced corporate bankruptcy attorney can be an invaluable resource to you at this time.

Initiating Chapter 11 Bankruptcy

After filing for Chapter 11 bankruptcy, a business has 120 days in which to submit a reorganization plan to a court of law. These plans typically include details about how the business will restructure its debts. Sometimes, these plans can also include details about adjustments to interest rates or repayment extensions.

After the development and recording of a reorganization plan, a majority of creditors must approve the plan and it must be confirmed by the court. A bankruptcy court will also decide the feasibility of the reorganization plan.

Once the 120-day period has elapsed, any interested party is required to file a competing reorganization plan with the court. These competitor reorganization plans often include details about the liquidation of nonexempt assets. Some of the interested parties that are known to file these plans include creditors, stockholders, and sometimes even trustees.

What if a Reorganization Plan is Rejected?

It is common in bankruptcy cases for one or sometimes even a handful of creditors to reject a business’s reorganization plan. Some of the most common reasons why creditors reject reorganization plans are that a debtor does not meet Chapter 11 filing requirements and challenges of valuations that are found in the reorganization plan. If you are unable to come to an agreement with a creditor about a reorganization plan, it is still possible to seek relief provided that the reorganization plan is equitable, fair, and does not discriminate against any type of creditor.

Confirmation of a Chapter 11 Bankruptcy Reorganization Plan

After a reorganization plan is confirmed, a business will be discharged from any debts that are filed in the plan. Also, immediately following confirmation of a reorganization plan, a business’s property will become free and clear of most liens and encumbrances.

The Advantages of Chapter 11 Bankruptcy

Some of the primary advantages of Chapter 11 bankruptcy include the following:

• When a business files for Chapter 11 bankruptcy, an automatic injunction is created that prohibits debtors from harassing the entity.
• Businesses that file for Chapter 11 bankruptcy are able to continue business operation.
• Some businesses are able to temporarily defer installment debts or rents.
• Debtors who file for Chapter 11 bankruptcy are able to use the reorganization process to adjust certain interest rates.

Contact an Oakland Chapter 11 Bankruptcy Lawyer

There are a number of different goals held by business owners who are interested in navigating the Chapter 11 bankruptcy process. Some of these goals include creating a plan of reorganization that establishes new terms and conditions between the business and its creditors, substantially lowering a company’s debt load, and creating a debt repayment plan that incorporates longer maturity dates. No matter, your exact goal, you need the assistance of an experienced bankruptcy attorney in Oakland to help you through. Contact the Law Offices of Melanie Travare today to schedule a free case evaluation.