How Long Does Chapter 11 Bankruptcy Take For a Small Business?

When a business is facing financial problems, there are options. A business doesn’t have to throw in the towel and shut down operations. They can stay afloat by filing for bankruptcy.

There are several types of bankruptcy to consider. Many businesses choose Chapter 11 bankruptcy because it allows for a reorganization. Sometimes newer businesses (and even some that have been around for quite a long time) experience problems with cash flow. A Chapter 11 bankruptcy lets a business stay up and running while it reorganizes its finances. The court supervises the process so that the company can effectively deal with its debt.

Keep in mind, though, that this type of bankruptcy does not wipe out debt. That is typically done only in a personal bankruptcy called Chapter 7. With a Chapter 11 bankruptcy, you will still need to pay some amount towards the debt.

Given this, you may wonder how long such a bankruptcy lasts. There is no set time limit for a Chapter 11 filing. The length of time can vary widely. A case involving a small business may be resolved in a few months, while a bankruptcy involving a large corporation with a lot of assets or debts may take five years or longer to complete. Most businesses can expect the process to take anywhere from 6 months to five years.

However, there are certain deadlines along the way that can affect the timeline. For example, a business filing for Chapter 11 has four months to propose a reorganization plan, but that can be extended up to 18 months. So, this could extend your bankruptcy timeline to some degree.

Generally, the length of the Chapter 11 bankruptcy process is influenced by factors like the complexity of the reorganization plan, negotiations with creditors, and court approval timelines. So, a lot of the time may be spent waiting for approvals and court hearings.

Once you meet with your bankruptcy lawyer and they have a chance to review your finances and documents and get a better idea of your business’s situation, they’ll be able to give you a better idea of how long the process will take.

In fact, communicating effectively with your attorney can help speed up the process. When you file for Chapter 11 bankruptcy, you will be working very closely with your attorney. Do your part and respond promptly to any requests for information. Return their calls in a timely manner. Provide them with as much documentation as you can. This will allow them to file your claim and navigate the bankruptcy process with minimal delays.

Contact Us Today

Bankruptcy is not a speedy process, but there are things you can do to speed things up.

West Palm Beach bankruptcy attorney Brian K. McMahon, P.A., can assist with the legal process and give the assurance that everything will work out. Our attorneys take all claims and matters seriously. To schedule a consultation, fill out the online form or call (561) 658-1789. We serve the West Palm Beach, Boca Raton, Port St. Lucie, and South Florida areas.