Chapter 11 bankruptcy concerns itself with helping people reorganize their debts, their income and their methods of repayment. It is a great solution for a business, because it offers a way to enable businesses to change the means of their revenue stream. However, it’s also a great option for individuals who have a high disposable income and do not qualify for Chapter 7 or Chapter 13.
This blog will provide a brief overview into Chapter 11 for individuals, and how it is possible for individuals to be able to free themselves of their debts and the accompanying stress by filing bankruptcy under Chapter 11.
Performing a means test
The first action that takes place during the bankruptcy for individuals process is a means test. This helps to determine whether a person can qualify for Chapter 7 bankruptcy, or whether they must file through Chapter 11. In order to qualify for Chapter 7, you must prove that your income is not high enough to repay any of your creditors sufficiently. If it is determined through this assessment that you would be able to pay off your debts within 5 years if they were slightly reorganized, than you will be able to file under Chapter 13. If this is not possible, the best option for you is Chapter 11.
The advantages of Chapter 11
The great aspect of Chapter 11 for individuals is the fact that it results in an automatic halt in the creditors’ ability to seek payments from you. It also helps you to customize the reorganization of your debts to work for you.
If you wish to file for Chapter 11 bankruptcy, it is advisable to seek guidance from a trusted legal advisor.
Source: Modest money, “File chapter 11 for the individual,” accessed Sep. 18, 2017