Chapter 11 is the section of the bankruptcy code that allows businesses to reorganize their debts. It typically involves large sums of money, but individuals can also use it. They rarely do since Chapter 7 and Chapter 13 are usually quicker and cheaper.
What is a voluntary Chapter 11?
A Chapter 11 case begins with the filing of a petition in bankruptcy court. Generally, Chapter 11 cases are voluntary and it is the debtor who takes the initiative and seeks bankruptcy relief. Occasionally, however, creditors will band together to file an involuntary bankruptcy petition against a defaulting debtor.
Why are you a candidate for an individual Chapter 11?
Why File an Individual Chapter 11 Traditionally, people filing Chapter 11 bankruptcy do so because they have exceeded the debt limits for a Chapter 13 bankruptcy. For instance, many celebrities and professional athletes are required to file a Chapter 11 rather than a Chapter 13 because they have far too much secured and unsecured debt.
Are there income requirements for a Chapter 11 plan?
There is no regular income requirement. In fact, there is no income requirement whatsoever. Many chapter 11 cases are filed for individuals who have no income, but have assets that will be sold and used to fund a chapter 11 plan. Administrative Requirements and Fees.
Is it easier to confirm Chapter 11 plans under Subchapter V?
Subchapter V to the rescue! Despite some burdens on debtors, the advantages to individuals under Subchapter V will make it substantially easier for individuals to confirm Chapter 11 plans.
What can Chapter 11 bankruptcy do for You?
Chapter 11 is intended to help businesses and individuals with significant debt. A filer who has income but can’t keep up with current debt payments can use Chapter 11 bankruptcy to create an affordable payment plan. The plan might include longer terms, a more favorable interest rate, or a reduced debt balance.
