Chapter 11 bankruptcy, often referred to as "reorganization" bankruptcy, is usually filed by businesses and partnerships, although it may also be used by individuals in some situations.
By filing for personal bankruptcy under Chapter 11, a person may be able to reorganize their debts while keeping their small business open or restructuring a significant amount of personal debt.
Individuals who are thinking about filing for Chapter 11 may also want to consider filing for Chapter 13 bankruptcy, which shares several similarities with Chapter 11.
Under Chapter 11 personal bankruptcy, filers are able to keep their assets while undergoing a reorganization aimed at repaying creditors. Chapter 11 filers are commonly described as "debtors in possession" due to their ability to maintain their assets during bankruptcy.
In a similar fashion, Chapter 13 bankruptcy, which is expressly designed for individuals, also allows filers to hold onto important property, such as a car or home, during the bankruptcy process.
Other similarities between personal Chapter 11 bankruptcy and Chapter 13 include:
Chapter 11 is primarily designed for businesses, so it may be a good option for business owners, whether they are the head of a major corporation or own a small bakery.
On the other hand, Chapter 13 was created to help with personal debts, and may allow individual filers to prevent home foreclosure or car repossession. Though Chapter 13 does have limits on debt amounts.
To learn more about which type of bankruptcy is right for you, connect with a local bankruptcy lawyer by filling out the brief form below.
As mentioned above, Chapter 13 may be a suitable alternative for personal bankruptcy. In addition to Chapter 13, the Chapter 7 debt discharge provides a unique form of debt relief.
Chapter 7 is designed for filers with limited assets, and may help eliminate some or all of a filer's unsecured debts, including medical bills, some personal loans, credit card debt, and payday loans.
If you're unsure about whether you should file for Chapter 7, 11, or 13, get a free case evaluation:Speak to a Bankruptcy Lawyer Today
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