New Jersey Chapter 11 Plan is a type of bankruptcy filing available to businesses in the state of New Jersey. It is a form of reorganization that allows a business to restructure its debts while continuing to operate. It also provides protection from creditors and allows the business to continue to operate while it works on a repayment plan. There are two types of New Jersey Chapter 11 Plan: Traditional Chapter 11 Plan and Small Business Chapter 11 Plan. The Traditional Chapter 11 Plan is for businesses with more than two million dollars in debt and at least twelve creditors. The Small Business Chapter 11 Plan is for businesses with less than two million dollars in debt and less than twelve creditors. Both types of plans allow the business to work out a repayment plan with its creditors that allows it to remain in operation and work towards eliminating its debt.
New Jersey Chapter 11 Plan
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FAQ
A case filed under chapter 11 of the United States Bankruptcy Code is frequently referred to as a "reorganization" bankruptcy. Usually, the debtor remains ?in possession,? has the powers and duties of a trustee, may continue to operate its business, and may, with court approval, borrow new money.
The filing must be done within a time fixed by the court and generally must be transmitted to the trustee at least seven days before the date of the confirmation hearing.
Typically, these debts may be paid back partially or in full over the course of several years, and some may be completely discharged. Repayment plans commonly last five years, but in some rare cases, Chapter 11 bankruptcy can take up to 10 years.
There is a 120-day period, from the time of filing the Chapter 11, during which the customer has the exclusive right to file a reorganization plan. Once this period has expired, a creditor or the case trustee may file a competing plan.
Common reasons for objecting to a Chapter 11 plan The plan is submitted in bad faith ? Debtors are required to be transparent and honest about the state of their finances. Any sort of questionable accounting could indicate an attempt to deceive the creditors and the court.
While the average length of a Chapter 11 Bankruptcy case can last 17 months, larger and more complex cases can take up to five years. And following the conclusion of the bankruptcy case, it can still take months for Debtors to begin distributing payouts to the highest priority class of Creditors.
After a Chapter 11 plan is confirmed by the court, the plan must be implemented and carried out, either by the debtor or by the successor to the debtor under the plan. If the plan calls for the debtor to be reorganized or for a new corporation to be formed, this function must be carried out first.
Generally, and subject to various defenses, the power to avoid transfers is effective against transfers made by the debtor within 90 days before filing the petition. But transfers to "insiders" (i.e., relatives, general partners, and directors or officers of the debtor) made up to a year before filing may be avoided.