Chapter 11 bankruptcy is a type of bankruptcy that is most often associated with companies. This is because the filing makes it easier to deal with a situation in which there are high debts and high incomes involved.
In the vast majority of cases, individuals benefit from filing under Chapter 7 or Chapter 13 bankruptcy titles. However, occasionally, a high-income person will find themselves in a situation where they are not eligible for a Chapter 13 bankruptcy filing. This might be because they have too much secured and unsecured debt. In this situation, it may be the best choice for them to file under Chapter 11.
What are the benefits of a Chapter 11 bankruptcy filing for individuals?
Chapter 11 can be ideal for an individual who is struggling with a poor cash flow and a high amount of debt. Perhaps they have, in recent times, earned an extremely high income and acquired significant assets as a result. Poor cash flow could have led them into debt very quickly due to the upkeep of their houses and mortgages.
Chapter 11 can help a person in a situation such as this because it does not require that the debtor start making payments immediately. They will have a certain amount of time to sell their assets so that they can start to repay their debts. They may also be able to delay mortgage repayments during this time.
If you are a person with a high income but you are struggling with debts, it is important that you take action to make a change in your situation. An experienced bankruptcy attorney can help.