Can Individuals File Chapter 11 Bankruptcy? (Yes, Here's How)

Yes, a person can declare Chapter 11 bankruptcy. While Chapter 11 is often associated with businesses, individuals can also file under this chapter, particularly when their debts exceed the limits for Chapter 13 bankruptcy or when they need the specific protections and reorganization options that Chapter 11 provides. 146

Key Points for Individuals Filing Chapter 11:

1. Eligibility: Individuals can file Chapter 11 if their debts exceed the Chapter 13 limits ($465,275 in unsecured debts and $1,395,875 in secured debts) or if they need to reorganize their debts in a way that Chapter 13 does not allow. 24
2. Process: The process begins with filing a petition with the bankruptcy court, which triggers an automatic stay that prevents creditors from taking further collection actions. The individual must then propose a reorganization plan that outlines how they will pay their debts while keeping their most important assets. 14
3. Plan Approval: The reorganization plan must be approved by the bankruptcy court and accepted by a majority of creditors (at least one-half of the number of creditors in each class of claims and two-thirds of the dollar amount of claims in each class). 46
4. Fees: The filing fee for Chapter 11 is $1,738, and additional attorney fees are typically higher than those for Chapter 13. 24
5. Complexity: Chapter 11 is more complex and time-consuming than Chapter 13, making it essential for individuals to seek the advice of an experienced bankruptcy attorney. 46
6. Subchapter V: Individuals whose debts are primarily business debts and do not exceed $7.5 million may qualify for a Subchapter V small business bankruptcy, which is a more streamlined and cost-effective process. 4