Chapter 11 Bankruptcy

Chapter 11 bankruptcy is a very complex area. Luckily, most people who file for bankruptcy in Arkansas do not need Chapter 11 bankruptcy. You can read more about Chapter 11 below; however, in most situations, filing Chapter 11 is overkill for all but the most specialized of circumstances. If you want to learn more about your options, call Crawley Law Firm at (870) 972-1150.

Chapter 11 is a type of bankruptcy usually filed by businesses, but also available to individuals under specific circumstances. If an individual has assets in excess of the requirements to file Chapter 7 bankruptcy or has debts too high for Chapter 13, it may be appropriate. If you and your lawyer decide to file Chapter 11, this information below will provide an overview of the steps and timeline of the process.

Filing For Protection From Creditors

Under Chapter 11, once the petition is filed, the court grants what’s called an “automatic stay.” This means that all collection attempts must immediately end. This gives the debtor relief from calls, letters, and other efforts to collect on the debt. Foreclosures are automatically halted as well. This stay lasts until the reorganization plan is approved by the court. Usually, a period of four months is given to developing this plan, but in some cases, the courts may extend that time up to 18 months.

Developing A Reorganization Plan

Next, the petitioner and their lawyers will make a plan to repay the debt and reorganize the business in a way that allows them to continue business operations while cutting expenses (and, in some cases, liquidating assets) in order to do this. The end goal of this plan is to serve as a contract between the debtor and the creditor, spelling out how the business will be run during the repayment period. The creditors do have the right to propose alternative plans if they are unhappy with the terms of one proposed by the debtor. This is rare in Chapter 11 filing, and it’s more likely that the creditors would move to have the bankruptcy re-filed as Chapter 7.

Waiting On A Plan Confirmation

The plan must be approved by the bankruptcy court, and this is referred to as “confirmation.” When making this determination, the courts are looking to make sure the plan is likely to work, submitted in good faith, and in the best interests of the creditors. This last issue is a little complicated, but it usually means that the creditors must receive at least as much as they would under Chapter 7 bankruptcy.

Securing A Discharge of Debt

At the end of this process, which usually takes between three and five years, the remaining debts will be dismissed. This is called “discharge,” and it only occurs if the debtor has acted in accordance with the reorganization plan, including paying down the debts as specified.

As with any other kind of bankruptcy, not all debts are subject to being discharged. Debts for alimony, child support, some kinds of tax debt, and others will not be relieved by the filing.

For small businesses, the timeline of events is shortened, and some of the details of the process change. In fact, of all the bankruptcy options, Chapter 11 has the most variables. Each plan is individually tailored to the financial situation of the debtor, so it can be very complicated. It is important to approach this option with the help of a skilled and experienced lawyer to ensure it is the appropriate option for filing.

Schedule your consultation with our bankruptcy attorney in Arkansas today!

Get In Touch

Contact Info

2702 S Culberhouse St, Suite N,
Jonesboro, AR 72401

Phone: 870-972-1150

Business Hours

Monday to Thursday: 9:00am – 5:00pm
Friday: 9:00am – 4:00pm

Payment Methods

Areas We Serve

We Serve All Of Northeast Arkansas including Jonesboro, Paragould, Forrest City, West Memphis, Mountain Home, Batesville, Helena, Cabot, Conway, Searcy, Maumelle, Sherwood, Jacksonville, Little Rock, and North Little Rock.

KD

We really appreciate you and I can already tell the difference. Feels like a thousand pounds off my chest and I can breathe 🙏

Willie J. 08/10/23

Google

Very great and friendly staff would recommend anyone that is filing bankruptcy please choose Crawley Law Firm.

Eric S. 07/26/23

Best in Jonesboro

Tiffany H. 06/26/23

Michael and his whole team were great! My filing was very fast and efficient and they answered every question I had in a timely manner!

Debbie V. 03/20/2023

Great experience very fast wonderful people to work with.

Shannon W. 03/21/2023

Professional, Helpful, and Kind. I would recommend to anyone. Thank you

Tanya 2/15/2023

Mr. Crawley and the staff were very kind and knowledgeable to me during my Bankruptcy period. They did an awesome job. They were quick to respond to all messages, calls, and inquires. I would definitely recommend Crawley Law Firm to anyone in need of help with your legal issues.

Casey 02/08/23

Mr Crawley and husband staff were very kind and knowledgeable to me during the trying time that is bankruptcy. They were quick to respond to all messages, calls, and inquires. I recommend them to anyone in need of help with your legal issues.

H Barnes

Awesome. Answered every question each time all the time. Be prepared when you walk into his office because they're already waiting to tackle your issues. Good staff too. This lawyer gets this thang done. Have your ducks in a row.. They will help you all the way.

Mr. and Mrs. Dowdy 08/19/2022

We want to personally thank Mr. Crawley and his staff for everything. We want the whole office know we appreciate each of you for being kind and having patience with us throughout the process.

Chapter 11 Bankruptcy