While Chapter 11 is mainly a form of bankruptcy for business entities, individuals also have the option of filing a Chapter 11 bankruptcy petition.
Since Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) in 2005, individuals with insurmountable debt face more stringent requirements that reduce their bankruptcy options in certain cases. Unless you pass the means test, which eliminates eligibility for debtors in certain income brackets, you are left with the option of Chapter 13. However, Chapter 13 eligibility prevents debtors from filing when their debts fall within the following parameters:
- Unsecured debts that are $383,175 or greater
- Secured debts that are $1,149,525 or greater
Being unable to file for Chapter 7 based on income and not qualifying for Chapter 13 based on debt leaves some debtors with only one bankruptcy option – Chapter 11 in Bakersfield, Ca for an individual. Unlike Chapter 13, Chapter 11 has no limitations on the amount of debt allowed.
How Individuals can File for Chapter 11 Bankruptcy
In terms of the automatic stay which stops creditor’s collection efforts, individuals filing for Chapter 11 have the same benefits. The debtor attends the creditors’ meeting (341 meeting) where the trustee and creditors may inquire while the debtor is under oath about the debtor’s finances and the prospects of reorganization. Their bankruptcy lawyers help debtors negotiate with secured creditors about surrendering assets over the next several months and they also prepare a reorganization plan to submit to the trustee. The court requires complete disclosure of financial history based on Chapter 11 requirements.
A Bakersfield bankruptcy lawyer can help you evaluate whether Chapter 11 is a viable option and the best way to deal with your debt. Contact AV-rated Bankruptcy attorney Max Gardner for a free consultation. 661-888-4335
Photo Credit: P Maillet via Flickr Creative Commons