Corporate Bankruptcy FAQ
Bankruptcy happens to more individuals and businesses than most people know. At Butler & Butler, LLP, we have provided eastern North Carolina with legal services since 1928. We know what bankruptcy looks like first hand, in all types.
Curious about corporate bankruptcy? Here are some questions we often hear.
What happens in a Chapter 11 bankruptcy?
Chapter 11 bankruptcy is intended for businesses, usually corporations. The order of this process is:
- Petition filing
- Confirmation and debt discharge
Once a business begins the Chapter 11 process, an “automatic stay of all collections” is in place and creditors may not continue to pursue collections activities.
What’s a reorganization plan and who creates it?
In a reorganization plan, businesses propose a payment plan that is organized by creditor priority. If a business owes for employee wages, tax agencies and stockholder interests, those parties have priority for payments. The court must approve of this plan before it goes into effect.
How long does the process take?
The process for Chapter 11 bankruptcy can take anywhere from six months to two years.
What happens to debts?
After the court confirms that the plan for repayment is lawful and reasonable, debts that were in place prior to confirmation are discharged. From this point forward, debtors begin paying via their reorganization plan.
Do creditors get paid? How?
Creditors receive payments, in accordance with the terms of the reorganization plan.
Still Have Questions?
If you or your business is facing massive debt, there are options. Filing for Chapter 11 corporate bankruptcy may be a reasonable means of relief. The lawyers at Butler & Butler, LLP, in Wilmington, North Carolina, can help. Contact our experienced bankruptcy attorneys by calling 910-726-3155 or sending us an email for a consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.