Can Individuals File for Chapter 11?
Chapter 11 Bankruptcy Is Not Just for Businesses
Chapter 7 eligibility requirements have become increasingly harder to meet,
which means that more and more people are turning to Chapter 11 to help
them get relief from overwhelming debt. At Sulaiman Law Group, LTD., our
Chicago bankruptcy lawyers can help you determine whether this type of
bankruptcy will provide the relief you need. If you are a high-income earner with
significant debts, you owe it to yourself to explore the path to a debt-free future.
Contact Sulaiman Law Group, LTD. online or call us at (312) 313-1613 to find out how we can assist you.
What Chapter 11 Bankruptcy Looks Like for Individuals
Long associated with businesses,
Chapter 11 bankruptcy is an increasingly popular choice for individuals. Chapter 11 differs
from Chapter 7 and Chapter 13 in a number of ways. For example, you will
not be required to attend a credit counseling class if you file for this
protection. Also, your debt will not be discharged when creditors approve
a payment plan, and you must commit future income or assets to your creditors
for the length of your bankruptcy plan.
Chapter 11 filings tend to be more expensive and onerous than a Chapter
7 or Chapter 13 filing, and are, therefore, not the right choice for everyone.
However, if you own significant assets or earn a significant income coupled
with a high amount of debt, this form of financial relief can help address
your needs. Our Chicago bankruptcy attorneys at Sulaiman Law Group, LTD.
will work closely with you to help you explore all of your debt relief options.
Using "Cram Downs" to Help with Underwater Homes
The "cram down" provisions of a Chapter 11 bankruptcy filing
can be particularly useful for people whose homes are underwater. Cramming
down allows the mortgage to be rewritten so that the principal is reduced
to what the property is currently worth, rather than what is actually owed.
A typical Chapter 11 case looks something like this:
- Brad purchased a property with a $325,000 mortgage a few years ago. Due
to economic turmoil, this property is now worth $150,000. Through Chapter
11, Brad can cram down his principal payments to $150,000.
Chapter 13 bankruptcy has a similar cram down provision. However, the reamortized loan must
be paid off at the end of the payment plan, which lasts for three to five
years. Chapter 11 allows these loans to be paid off over a period of 20
to 30 years, giving individuals time to get their finances in order and
allowing them to remain in their homes.
Contact Our Chapter 11 Bankruptcy Attorneys in Chicago
While Chapter 11 is typically associated with struggling businesses, anyone
can apply for this form of relief. However, this type of bankruptcy protection
might not be the best option for everyone. It can be a viable form of
debt relief for high-income individuals with significant assets and significant
Sulaiman Law Group, LTD., our team will thoroughly review your financial situation to determine
whether this type of filing can best benefit you.
If you are overwhelmed by debt, contact Sulaiman Law Group, LTD. to
schedule an initial consultation.