Question

Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, how long after a firm files for bankruptcy protection do creditors have to wait before submitting their own reorganization plan to the court?

- 60 days
- 45 days
- 180 days
- 12 months
- 18 months

Answer 1

Creditors must wait 18 months after a firm files for bankruptcy protection to submit their reorganization plan, in accordance with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Step-by-step explanation:

Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, creditors must wait 18 months after a firm files for bankruptcy protection before they can submit their own reorganization plan to the court. This period allows the debtor company a chance to propose their own plan and work on its confirmation without the competition of plans from creditors. This mechanism is in place to encourage a debtor-focused resolution during the initial stages of bankruptcy proceedings.