Atlanta Chapter 11 Bankruptcy Timeline
Chapter 11 is in a universe of its own. It is a much more expensive and time consuming endeavor that will not be right for most individuals. However, I also routinely help businesses and high-net worth individuals file Chapter 11 bankruptcy to save assets, invoke the protection of the automatic stay, and restructure their debts to give them the new beginning they need. Just take a look at the timeline below if you want an idea of how complicated a Chapter 11 case can be.
Day 1 – After meeting with your Chapter 11 attorney, your petition will be filed and your filing fee must be paid.
Within a Few Days – When a Chapter 11 case is filed, there are a number of motions that must be filed on the first day the petition is filed, which is why they are often called the “First Day Motions”. Such motions often request the court to permit the use of cash collateral to continue the operation of the business if a secured creditor has a lien on the business’ accounts receivable. This motion will often involve paying employee salaries and key inventory providers as well.
Within 20-40 Days – The U.S. Trustee will hold a meeting of creditors. There is no Chapter 11 Trustee, as the debtor acts as the “debtor-in-possession” in a typical Chapter 11 case. What this means is the the debtor in a Chapter 11 case will have all the rights and powers of a Trustee in a typical Chapter 7 case, and will continue to operate the business.
Within 120 Days – The Debtor has exclusivity period to file a plan within 120 days after the order of relief and, if a plan is filed by the debtor within that time period, the debtor has the exclusive right to obtain acceptances of the plan within 180 days after the order for relief.
At Least 28 Days After Disclosure Statement Filed – The court will hold a hearing to approve the disclosure statement.
At Least 28 Days After Approval of Disclosure Statement – The court will hold a hearing on confirmation of the Chapter 11 Plan.
Discharge – In an individual case, the debtor will receive a discharge after completing all plan payments. In a corporate case, the debtor will receive a discharge upon the substantial confirmation of the Chapter 11 Plan.