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Chapter 11 Bankruptcy in NJ

For Business:
Filing chapter 11 is mainly filed by businesses, not individuals. In contrast to the liquidation process of chapter 7, chapter 11 usually allows the debtor to retain control of their business and operations as a debtor in possession. Even though they retain control, they are still subject to oversight and jurisdiction of the court.

The debtor works with one or more comities that represent the interest of creditors and stockholders to develop a plan of reorganization to get the company out of debt. The plan involves relieving the company from paying part of its debt so that the company can get back on its feet. The plan needs to be accepted by all parties and confirmed by the court. However even if a party does not accept the plan, the court can decide to disregard the vote and move forward as long as the plan treats creditors and stockholders fairly.

As with other forms of bankruptcy, there is a structure to decide who gets paid. Secured creditors, such as banks, are paid first. Unsecured creditors such as other banks, suppliers, and bondholders, have the next claim. Stockholders and owners of the company have the last claim on assets. Stockholders and owners may not receive anything if the secured and unsecured creditors are not fully repaid.

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File Chapter 11 NJ | Bankruptcy Lawyer NJ | Bankrupt Business NJ