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Bankruptcy Basics
Bankruptcy Judges Division
Administrative Office of the United States Courts
APRIL 2006
Revised Third Edition
For cases filed on or after October 17, 2005

Contents

Introduction

The Discharge in Bankruptcy

Chapter 7. Liquidation Under the Bankruptcy Code

Chapter 13. Individual Debt Adjustment

Chapter 11. Reorganization Under the Bankruptcy Code

Chapter 12. Family Farmer Bankruptcy

Chapter 9. Municipality Bankruptcy

Chapter 15. Ancillary and Other Cross-Border Cases

SCRA. Servicemembers' Civil Relief Act

SIPA. Securities Investor Protection Act

Bankruptcy Terminology


Chapter 11
Reorganization Under the Bankruptcy Code

Who Can File a Plan

The debtor (unless a "small business debtor") has a 120-day period during which it has an exclusive right to file a plan. 11 U.S.C. 1121(b). This exclusivity period may be extended or reduced by the court. But, in no event, may the exclusivity period, including all extensions, be longer than 18 months. 11 U.S.C. 1121(d). After the exclusivity period has expired, a creditor or the case trustee may file a competing plan. The U.S. trustee may not file a plan. 11 U.S.C. 307.

A chapter 11 case may continue for many years unless the court, the U.S. trustee, the committee, or another party in interest acts to ensure the case's timely resolution. The creditors' right to file a competing plan provides incentive for the debtor to file a plan within the exclusivity period and acts as a check on excessive delay in the case.