The most crucial question that virtually each person asks prior to starting a Bankruptcy case is: what will be the timeline for the Bankruptcy case?
For the most part, all the Bankruptcy cases have a similar timeline. However, here we will talk about the chapter 11 Bankruptcy timeline. The filing takes at the least 120 days to complete all the formalities.
The most common timeline for a Bankruptcy case is:
1. The first day: this is basically called the petition day wherein the debtor submits his petition along with creditors list (name, address and account information) to the court clerk in the Bankruptcy court. It can have a list of the 20 largest unsecured claims as well. This is the first step that establishes the appointment and funds to be used during the Bankruptcy proceedings. This step includes appointing of trustee (debtors counsel) or professional to handle the account information like a Certified Public Accountant.
2. At 15 days: a debtor needs to submit a statement that includes all his financial affairs. It includes listing of his assets, liabilities, revenue, and expenditure. It contains information about exempt property, personal property, real property, a list of co-debtors, listing of unexpired contracts and leases and total list of creditors holding secured claims and unsecured claims.
3. At 30 days: a meeting called a 341 meeting or meeting of creditors is held. This meeting is held to answer queries from the creditor’s side. The answers are mostly given by the trustee and the debtor’s representative, mainly his attorney. The main questions asked by the creditors are: the status of leftover assets, the reason for Bankruptcy, and the debtor’s plan to restructure the debt and business. After this meeting the first monthly operating report is made that tells about progress and result of the plan.
4. In between 30 days and 120 days point: during this time all the other court- related issues are resolved. There are various proceedings held to resolve stay relief issues, contractual and lease issues and protection for assets. This is the time when the debtor needs to make a reorganization plan and convince his creditors to accept it. At the same time, the trustee analyzes the possibilities to recover the assets.
5. At 120 days: this is the deadline for the creditors to file for proof of claim and for the debtor to submit the plan of reorganization. However, in most cases, it is extended. The debtor needs to submit a disclosure statement that outlines the proposed plan. However, the notice for the statement is issued 25 days prior. The voting ballots are given to the creditors and their vote is then counted.