Chapter 11 for Individuals

Summary

This practice note provides an overview of an individual's Chapter 11 case. Chapter 11 of the Bankruptcy Code, entitled "Reorganization," allows a debtor to reorganize its debts and financial affairs or to liquidate its property. Although Chapter 11 is typically used by business debtors, it applies to individual debtors as well. An individual may elect to file under Chapter 11 when the individual's debt exceeds the limits allowed under Chapter 13 or when the individual wants the protections that are only available to Chapter 11 debtors. Because Chapter 11 is complicated and expensive, individual Chapter 11 cases are seldom filed. When filed, the individual is usually a high net-worth individual, entrepreneur, or professional who has significant debt but who also has significant equity in assets, such as a home, investment property, or business, that the individual is seeking to preserve.