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Debt Reorganization for Individuals Via Chapter 11

When Individuals May Use Chapter 11 Bankruptcy Petitions

Chapter 11 is known best as form of bankruptcy available to businesses. Chapter 11 is a debt reorganization bankruptcy for businesses, much like Chapter 13 allows debt reorganization for individuals. When an individual or family has a debt load so high that they do not qualify for Chapter 13 bankruptcy, Chapter 11 becomes an option. In consumer cases involving extraordinarily high debt levels, Chapter 11 bankruptcy allows reorganization of individual debt — much like Chapter 13.

I am Houston bankruptcy lawyer Margaret McClure. I work with several families who have turned to Chapter 11 bankruptcy as the best possible solution to difficult debt problems.

The limits of Chapter 13 bankruptcy

Chapter 13, sometimes called wage earner bankruptcy, is intended for consumers who have a high debt load but who also have sufficient income to repay most or all of their debts if the repayment terms can be altered.

The U.S. Bankruptcy Code places limits on the amount of debt an individual may have and qualify for reorganization of individual debt under Chapter 13. As of late 2009, the limits were $326,900 of unsecured debt and $1,010,650 of secured debt. It is easy to see how an individual or family could exceed these limits.

In such cases, an individual may still file a reorganization plan with the bankruptcy court. However, the individual reorganization plan must be filed under the rules and regulations of Chapter 11 instead of Chapter 13.

Free attorney consultation

All it takes is a recent home mortgage loan on a $2 million house — and loss of income. When falling behind on mortgage payments and facing the possibility of home foreclosure, it can be reassuring to know that options exist even if your level of debt bars you from a Chapter 13 bankruptcy petition.

Learn more about the debt relief options that Chapter 11 bankruptcy offers to individuals via personal debt reorganization plans. Schedule a free consultation with me by calling 713-574-5426 or contacting us online.