Is Chapter 11 Bankruptcy For Businesses Or Individuals?
If you are a business owner and want to file for reorganization bankruptcy so that you can reorganize debts while keeping your business open, you will likely be planning to file for Chapter 11 bankruptcy. Yet in some instances, you might have heard about individuals who filed for Chapter 11 bankruptcy even though Chapter 13 bankruptcy is the common type of reorganization bankruptcy for individuals. As such, you may be wondering: is Chapter 11 bankruptcy for businesses or individuals? The answer is that Chapter 11 bankruptcy can be used by both businesses and individuals according to U.S. bankruptcy law, depending upon the individual’s circumstances. Our West Palm Beach bankruptcy lawyers can provide you with additional information.
Chapter 11 Bankruptcy is Commonly Associated with Businesses or Commercial Bankruptcy Filings
Chapter 11 bankruptcy is a type of bankruptcy that is commonly associated with business bankruptcy or commercial bankruptcy, and Chapter 11 bankruptcies are filed more often by businesses than individuals. According to data from Statista, the majority of Chapter 11 bankruptcy filings in all states are commercial filings, although Chapter 11 bankruptcies are filed by individuals, as well. Some states have higher rates of individual Chapter 11 bankruptcy filings than others, including Florida. In Florida, about 12 percent of all Chapter 11 bankruptcies are filed by consumers, while the remaining 82 percent are commercial bankruptcy filings. In 2021, Florida had the fourth-highest rate of overall Chapter 11 bankruptcy filings in the country.
Individuals Often File for Chapter 11 Bankruptcy When They Are Ineligible for Chapter 13 Bankruptcy
For the most part, Chapter 11 bankruptcy is used by businesses. Why do individuals file for Chapter 11 bankruptcy instead of Chapter 13 bankruptcy? In short, if an individual debtor has too much debt, that debtor may be ineligible to file for Chapter 13 bankruptcy and may be able to file for Chapter 11 bankruptcy instead.
What are the debt limits? They increase on a regular basis, so it is important to check with a bankruptcy lawyer in South Florida to determine whether your debts are too high to file for Chapter 13 bankruptcy such that you should file for Chapter 11 bankruptcy instead. In 2022, you cannot have more than $465,275 in unsecured debt or more than $1,395,875 in secured debt. That figure increased recently, so it is not set to increase again until 2025.
Seek Advice from a Chapter 11 Bankruptcy Attorney in West Palm Beach
Determining your eligibility for bankruptcy as a consumer can be complicated, especially when you are unsure about filing for Chapter 11 or Chapter 13 bankruptcy. Many individuals assume that Chapter 11 bankruptcy is only for businesses, but it is also a bankruptcy chapter under which individual debtors can seek bankruptcy protection if their debts are too high to qualify for a Chapter 13 bankruptcy case. One of the experienced West Palm Beach Chapter 11 bankruptcy attorneys at Kelley Kaplan & Eller can assess your circumstances for you today and help you to determine whether Chapter 11 bankruptcy is right for you. Whether you own a business or you are struggling with significant consumer debt, Chapter 11 bankruptcy could be the right option for you.
Sources:
govinfo.gov/content/pkg/USCODE-2011-title11/html/USCODE-2011-title11.htm
statista.com/statistics/1118037/bankruptcy-filings-us-chapter-11-state/
