What you can expect when filing bankruptcy depends in part on what type of bankruptcy you or your company files. Here is an overview of what to expect under the three chapters of bankruptcy, in which our lawyers at Genova, Malin & Trier, Attorneys at Law, most often file bankruptcy petitions.

What to Expect in a CHAPTER 7 Bankruptcy Filing

In a Chapter 7 case, a trustee is appointed to take possession of the property of the estate. Approximately twenty to forty days after filing the petition, you (with your experienced Genova, Malin & Trier bankruptcy attorney at your side) must attend the “first meeting of creditors,” also known as the “341 meeting.” The trustee will ask you questions about you or your business’s assets and liabilities, and income and expenses. Your creditors may also attend that meeting and ask you questions about you or your business’s financial condition. If you do not have any non-exempt assets, the bankruptcy case will Typically end in about three or four months. If your or your business has assets, when your case ends will depend on how long it takes the trustee to gather your assets, sell them, and distribute the proceeds to your creditors. If the debtor is an individual, he or she automatically receives a “discharge” at the end of the case unless a creditor or the trustee objects.

What to Expect in a CHAPTER 11 Bankruptcy Filing

If your company files under Chapter 11, (also known as “business reorganization bankruptcy”) your company becomes the “debtor in possession” with the right to retain the property of the estate and operate the business. Trustees are rarely appointed in Chapter 11 cases. Approximately twenty to forty days after filing the petition, you (with your experienced Genova, Malin & Trier bankruptcy attorney at your side) must attend the “first meeting of creditors,” also known as the “341 meeting.” The trustee will ask you questions about your company’s assets and liabilities, and its income and expenses. Your creditors may also attend that meeting and ask you questions about your company’s financial condition. The United States Trustee may appoint a “creditor’s committee” which usually consists of your company’s seven largest unsecured creditors. The creditor’s committee consults with the debtor, investigates the debtor’s conduct and financial condition, and participates in drafting the plan of reorganization. The debtor has the exclusive right to file a plan of reorganization for the first 180 days after filing.The reorganization plan outlines how the debtor will deal with its creditors. The plan typically divides creditors into classes. Creditors vote on the reorganization plan. Even if they reject the plan, the court may confirm the plan if it finds that the plan is “fair and equitable.” Plans may provide for payments to creditors over any reasonable period of time. Sometimes, payments on secured debts are extended over a period of years.Confirmation of the plan vests all property of the estate in the debtor and discharges all debts and liens that arose before the confirmation date except as provided for in the plan. Some plans (usually those that the debtor and creditors have mutually agreed to prior to filing) can be confirmed in two or three months. Usually, however, it takes between one and two years to confirm a plan.

What to Expect in a CHAPTER 13 Bankruptcy Filing

A trustee is appointed in a Chapter 13 case, but does not take possession of the property of the estate. Approximately twenty to forty days after filing the petition, you must attend (with your experienced Genova, Malin & Trier bankruptcy attorney at your side) the “first meeting of creditors,” also known as the “341 meeting.” The trustee will ask you questions about your assets and liabilities, and income and expenses. Your creditors may also attend that meeting and ask you questions about your financial condition.Individuals engaged in business and filing under Chapter 13 must file a plan within fifteen days of filing a bankruptcy petition. The plan must devote all of the debtor’s disposable income to payments under the plan for the next three to five years.The debtor must begin making payments under the plan to the Chapter 13 trustee within thirty days after the case is filed. Creditors do not vote on the plan. If the plan complies with the requirements of the Bankruptcy Code, the court must confirm the plan. The confirmation hearing is usually held about (45 days) after the case is filed. A discharge is granted when the debtor has completed all payments under the plan.