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Chapter 11
 

  • No debt limits

  • Greater reorganization opportunities

  • Expensive and complicated

 

Generally speaking Chapter 11 is intended for business bankruptcy. However, even if your debt is all consumer debt, Chapter 11 may be the way to go if your debt exceeds the limits of Chapter 13.

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If your total secured or total unsecured debt exceed specified levels, which may include personal and/or business debt for which the individual is liable, Chapter 11 may work best for you. These levels change every three years. Currently, as of April 2025, for individuals whose debt is more than 50% personal debt, they stand at $465,275 in unsecured and $1,395,875 in secured.

Why Individuals Might Choose Chapter 11

Cram-down Provision

This gives the ability to reduce secured debt (like car loans or investment property loans) to the asset's current market value.

No Trustee

Chapter 11 Sub-Chapter 5 often allows for faster reorganization without a trustee managing the estate.

High-Value Assets

Often used to protect significant assets or complex portfolios. This factor may offset the significant cost of a Chapter 11 bankrutpcy.
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