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Illinois Chapter 11 Bankruptcy
Chapter 11 bankruptcy is also known as Reorganization Bankruptcy. This is probably the most complicated and lengthy type of bankruptcy. Chapter 11 bankruptcy allows the debtor to continue to operate a business and reorganize its financial affairs. Chapter 11 is also available to individuals with debts that are too great to file under Chapter 13 (Reorganization for individuals) and allows the individual to reorganize his or her financial affairs by, among other things, revising terms of their mortgage and other debts.
What does the process look like?
First, you file a bankruptcy petition, where you list all of the business’ assets and liabilities. The date of the filing of the bankruptcy petition is the “Petition Date,” which is very important because as of that date, creditors are prevented from seeking payment directly from you and must go through the bankruptcy court to seek payment.
Then, you will prepare a Plan of Reorganization, where you terminate certain contracts, leases, etc. and revise the terms of other debts. Your creditors are able to voice their opinions on the Plan but ultimately, the court decides whether or not to ‘confirm’ it.
Once a Plan is confirmed, you must follow the payment schedule outlined in the Plan and provide progress reports to the court. If you don’t, your creditors can ask the court to, among other things, repossess certain assets.
Will I lose my business?
There are no guarantees but if you work out a repayment plan that is amenable to your creditors, you will likely be able to remain in possession of your business.
What will a bankruptcy lawyer cost?
It will depend on the size of your assets and liabilities and will be subject to the court’s approval.
What will I need to provide my bankruptcy lawyer?
First of all, initial consultations are free. You should never pay an attorney that you haven’t hired yet. That being said, you will want to be completely honest with your attorney and yourself. Organize your records so that no creditors ‘pop out of the woodwork’ later on, as that can actually hurt your case.
Keep a clean file of all recent bank statements, tax returns and financial statements as well as any correspondence with creditors, recent appraisals and anything else that indicates what you have and what you owe.
Contact us. We are free and we are confidential. Our staff attorneys will answer your questions and try to point you in the right direction of a bankruptcy attorney in your area.
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