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 Bach Law Offices, Inc.

Bach Is Your Financial Future.

555 Skokie Blvd Suite 250, Northbrook, IL 60062
PO Box 1285, Northbrook, IL 60062

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(847) 440-5998

Individual Chapter 11 Bankruptcy Filing

Individual Chapter 11 Bankruptcy Filing - Northbrook, ILThe following article will cover:

  • The purpose of an individual Chapter 11 bankruptcy filing in Illinois and how it provides relief for high levels of debt that may not be eligible for Chapter 7 or Chapter 13 bankruptcy.
  • The differences between Chapter 11 bankruptcy and other types of bankruptcy filings, including the significant time commitment and hourly fee involved.
  • The eligibility criteria for an individual to file for Chapter 11 bankruptcy and the protection provided by the automatic stay provision during the bankruptcy process in Illinois.

What Is The Purpose Of An Individual Chapter 11 Bankruptcy Filing In Illinois?

The purpose of an individual Chapter 11 bankruptcy filing in Illinois aligns with the general purpose of any bankruptcy filing: to help people alleviate their debt. Typically, you would be eligible for either a Chapter 7 bankruptcy, which extinguishes your debt entirely, or a Chapter 13 bankruptcy, which structures a repayment plan.

However, you might not qualify for a Chapter 13 bankruptcy if your debt level is too high. If your secured debt—secured against your assets like your home—exceeds $1,395,875 or your unsecured debt—credit cards, medical bills, and personal loans—exceeds $465,725, you won’t be able to use Chapter 13 to manage your debt.

In such circumstances, if you need relief from overwhelming debts or if you’re trying to save your home, Chapter 11 might be your best option. This is especially true if you have more than $465,000 in unsecured debt or over $1.3 million in secured debt. Chapter 11 is more akin to litigation and isn’t a cheap reorganization method, but it provides significant relief for those with debts in this bracket.

How Does An Individual Chapter 11 Bankruptcy In Illinois Differ From Other Types Of Bankruptcy Filing?

Chapter 11 bankruptcy, whether individual or corporate, differs significantly from Chapters 7 and 13. For instance, while in a Chapter 13 bankruptcy you typically file a plan immediately or within two weeks, in Chapter 11, it might take months to file a plan due to other tasks such as filing motions or setting deadlines for creditor claims.

Moreover, Chapter 11 involves an hourly fee, unlike the flat fee for Chapter 13, and requires a significant time commitment from both you and your attorney. You need to report monthly on your income and expenditures and, depending on the Chapter of bankruptcy, you might also need to pay quarterly fees or trustee payments.

In contrast, Chapter 7 is a fresh start liquidation case. It’s possible to file a Chapter 11 to liquidate, but the main reason for doing so is control. In Chapter 11, you maintain control of asset sales, unlike in Chapter 7, where a trustee is responsible for this process.

What Are The Eligibility Criteria For An Individual To File For Chapter 11 Bankruptcy?

There are no specific eligibility criteria for an individual to file for Chapter 11 bankruptcy. You just need to be legally residing in the United States. While anyone can file for Chapter 11, it’s not advisable if you’re only trying to wipe out a small amount of debt. The key is to be an honest debtor and seek genuine relief from the system.

Does The Automatic Stay Provision Protect Individuals In Illinois During A Chapter 11 Bankruptcy?

The automatic stay provision in any bankruptcy case throughout the United States protects an individual or corporation from the day the case is filed until it is confirmed. This means the court has approved your repayment plan, which usually occurs when the case closes shortly after the first payments under the plan are made, or when a court order lifts it. However, a creditor can ask the court to lift the stay at any time, just as in any other bankruptcy case. The stay remains until either of these two events occur.

For more information on Individual Chapter 11 Bankruptcy Filing, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (847) 440-5998 today.

Bach Law Offices, Inc.

Bach Is Your Financial Future.
Contact Us Today! (847) 440-5998