Why Would an Individual File Chapter 11

Chapter 11 lets people who don’t qualify for Chapter 13 or need some of the special protections that Chapter 11 provides reorganize their debt. They can catch up on mortgage arrearages, restructure debt on investment property, and in most cases, pay pennies on the dollar toward credit card and medical debt.

Does Chapter 11 apply to individuals?

Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor’s business affairs, debts, and assets, and for that reason is known as “reorganization” bankruptcy. It is most often used by large entities, such as businesses, though it is available to individuals as well.

Who qualifies Chapter 11?

Thus an individual whose secured debt or unsecured debt exceeds the limits of a Chapter 13 filing, may file for chapter 11 and reorganize his or her finances. A debtor need not be insolvent to file a Chapter 11 Bankruptcy. As long as a debtor needs to reorganize its finances, a Chapter 11 is permitted.