Traditionally, Chapter 11 bankruptcy filings have been reserved for complex corporate reorganizations. Recently, sophisticated Maryland bankruptcy attorneys, such as Mr. Burns, have begun apply the debtor-friendly rules of Chapter 11 to certain individual consumers in order to obtain a more meaningful debt restructuring.
A Chapter 11 is a reorganization bankruptcy filing and while it is geared primarily for businesses, it may be very useful for certain individuals with sizeable debts and assets who do not meet the strict asset/debt limitations of a Chapter 13 filing. A Chapter 11 filing offers greater flexibility and options. It can be used for real estate cases where you find that you are past due on your mortgage payments but are in a position where you can catch up.
If you have debts that are even slightly in excess of the Chapter 13 debt limit, you may be eligible to file for a Chapter 11 bankruptcy reorganization. A Chapter 11 filing allows you an opportunity to buy time to reorganize and plan a realistic repayment plan for your debts. Your assets would also be protected as allowed by law.
Among the reasons for filing a Chapter 11 bankruptcy are divorce, lawsuits or medical illnesses. A loss of income or failure in business or even a loss of a professional license would precipitate this type of filing. Most of those who file a Chapter 11 bankruptcy reorganization are professionals or people who have a high net worth. Many of those are people who have consistently made a significant income but have found their income down due to professional or personal setbacks.
A Chapter 11 filing does bring with it legal requirements and responsibilities. This is particularly the case for those who file and are business owners. It is also extremely complex and time consuming. There are often many separate matters that must be dealt with independently before the bankruptcy case is filed. Filing a personal bankruptcy under Chapter 11 is more expensive than a Chapter 7 or Chapter 13 bankruptcy. The fees vary, depending on the facts. However, in many of these individual reorganizations, the savings and convenience substantially outweigh the increase in fees and costs.
Depending on your financial circumstances, a Chapter 11 bankruptcy filing may be the best alternative for you. Contact us today to discuss your options.
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