What happens to my creditors in a Chapter 11 bankruptcy?

When filing Chapter 11 bankruptcy in Nevada, your creditors have certain rights and responsibilities. The main aim of a Chapter 11 bankruptcy is to reorganize debt. Creditors are usually given a percentage of what is owed to them, and a payment plan is put in place for the repayment of the remaining debt. Creditors are entitled to receive notices of the bankruptcy proceedings and can vote on any proposed reorganization plan. In some cases, creditors may be eligible for more money or a more favorable plan than what is proposed. Creditors can also object to the proposed plan if they feel it does not adequately provide for payment of their debt. Creditors are not allowed to ask the debtor for payment while the bankruptcy proceedings are underway. They also cannot pursue legal action against the debtor to collect what is owed. This includes any attempts to place liens on the debtor’s property. The Chapter 11 bankruptcy process typically takes time to be completed. Creditors may be required to wait months or even years to receive any payments on the debt. The court must approve any reorganization plan before creditors can receive payment.

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What happens to my creditors in a Chapter 11 bankruptcy?

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