When must I pay my creditors during a Chapter 11 bankruptcy?

Creditors must be paid during a Chapter 11 bankruptcy according to a repayment plan that is approved by the court. The purpose of the repayment plan is to help you reorganize your debts so that you can pay them off over time, while allowing you to keep your business running. The court will require you to submit a repayment plan that is feasible and accomplishes the goal of repaying your creditors. The repayment plan must include a method of paying your creditors over time, as well as a proposal for how to pay the secured debt connected to your business. The repayment plan will have to state the monthly payments, the deadlines for payments, and the total balance that is being owed. You will be required to make payments to your creditors according to the terms of the repayment plan. There are two types of payment deadlines: the priority deadlines and the secured creditors deadline. The priority deadlines are for payments to priority creditors such as taxes, child support arrears, and alimony. The secured creditors deadline is for payments to creditors who are secured by collateral, such as a loan secured by an asset. If you fail to make timely payments to your creditors, the court may dismiss your bankruptcy case and you may have to file for bankruptcy protection again. Therefore, it is important for you to make all payments on time according to the repayment plan.

Related FAQs

When must I pay my creditors during a Chapter 11 bankruptcy?

Related FAQs

Related Blog Posts