Chapter 11 Bankruptcy

You will have a free initial consultation. You will be provided with some basic worksheets prior to your appointment that will provide an overview of your finances.

If you choose to move forward with a Chapter 11 bankruptcy filing, You can anticipate a certain procedure in a which is set forth as follows:

1. You will pay the regular fees and costs that will be fully explained to you.

2. You and your attorney will meet to pull credit and review worksheets. The worksheets are much more detailed than the original worksheets, which you fill out prior to our first meeting.

3. One you fill out the worksheets, we use them to prepare your bankruptcy schedules, which are filed with the Court. The bankruptcy schedules are detailed listings of your assets, liabilities, budget and financial affairs. The schedules will be signed by you under the penalty of perjury. Therefore, we will want you to make sure that the schedules are as accurate as possible.

4. After the Chapter 11 Bankruptcy case has been filed, you will receive a package from the United States Trustee’s Office containing the U.S. Trustee Guidelines. It will be extremely important for you to understand and comply with the guidelines. If you do not, your case will be dismissed or converted to a Chapter 7. You should be familiar with the guidelines which need to be incorporated into your personal affairs immediately. These include:

a. Closing out the books, including bank accounts and opening new books;

b. Making sure you have insurance on all of your assets;

c. Having new bank accounts with the words “Debtors in Possession” or the letters DIP on the checks.

d. The guidelines require that you have at least three bank accounts: A general operating account, Tax Account and Payroll Account.

5. You and your attorney will have a guideline meeting as soon as you receive the guidelines from the U.S. Trustee office.

6. After approximately thirty (30) days from the filing of the case, there will be a Meeting of Creditors. It will be essential for you to attend the Meeting of Creditors. You will need to bring a copy of your driver’s license and social security card.

7. You and your attorney will discuss the questions that you will be asked at the Meeting of Creditors. You will receive a notice from the Court as to when the Meeting of Creditors will be held. Make sure this date is on your calendar.

8. Within sixty (60) days after the filing of the bankruptcy case, you need to assume or reject any real property, leases or request an extension to do so.

9. You will be required to file monthly reports each month regarding the operation of the business.

10. Within 180 days of the filing of the case, you must file a Plan and Disclosure Statement unless we have receive an extension from the Court. It takes approximately four months to have the Plan approved. The plan is submitted to creditors for a vote. If your Plan is approved by the Court, you can ask that your case be closed. It normally takes 60 days to close the case after a request is made to the Court to close the case. If you Plan is not approved, the case is subject to being dismissed or converted to a Chapter 7.

11. You will be required to pay quarterly fees. The quarterly fees are payable within thirty (30) days from the each calendar quarter. If you fail to make quarterly fee payments, your case will be dismissed or converted.

12. We need to put together a team of experts to assist you in this case. The team will include your attorney, your accountant, an attorney who will assist you with non-bankruptcy legal matters, and an appraiser.

13. If you have a business, you may want to go ahead and have a search done as far as liens against the company’s assets. You should do this in every county that you do business.

14. In order to be paid, all professionals must be appointed by the Court, keep time records and file a fee application with the Court. We will assist the professionals being appointed and filing a fee application. You must approve of all bills by the professionals before we will submit the fee application.

15. If you or someone is going to lend the company money to pay for the operation aspects of the company or the attorney fees, you should do it on a secured basis. You will need a note, security agreement and a UCC Financing Statement for any loan that is made prior to the filing of the case. After the filing of the case, the Court must authorize the lending of money as well as the sale of any assets.

16. One guideline is what I call “The Rules of Paying.” The rules are:

A. You must pay, who you may and who you may not pay.
B. You must pay any new debt.
C. You may pay secured debt.
D. You cannot pay unsecured debt and priority debt which is in existence at the time of the filing of the case. These creditors must be paid through the Plan.

17. You will need to make money in order to show a way to pay the creditors back.

18. It will be essential for you to maintain payments of all taxes and the filing of all tax returns. Your case will be subject to dismissal or conversion if you do not. The taxing authorities take a very aggressive stand on the payment of fees and the filing of forms post petition.

19. We do not provide any tax advice. If you need tax advice, you should consult with a tax attorney or an accountant. We can provide you with the names of tax attorneys who may be able to help you in this regard.

20. The effects of filing the bankruptcy case will be an injunction against creditors in calling you, writing you, suing you or trying to repossess your property. Further, your landlord cannot terminate your lease providing the Court finds that there is a valid lease between you and the landlord.

21. One of the things that you will need to do to rehabilitate your personal situation and your business situation is to learn to live on a budget and to project your income and expenses from a personal and business and standpoint. Your attorney will give you forms to assist you in this regard.