When Should a Consumer File for Chapter 11 Bankruptcy?
When a consumer wants to file for reorganization bankruptcy , that consumer will typically file for Chapter 13 bankruptcy. Yet Chapter 11 bankruptcy is also a type of reorganization bankruptcy, and in certain situations, consumers file for Chapter 11 instead of Chapter 13. In most cases, the reason that a consumer will file for Chapter 11 bankruptcy instead of Chapter 13 bankruptcy is the debt limit. Relatively recent changes to the Chapter 13 debt limits have resulted in an increase in the debt limits, thereby making it easier for consumers to qualify for Chapter 13 bankruptcy based on the amount of their debt. However, circumstances certainly may arise in which a consumer is ineligible for Chapter 13 bankruptcy due to the amount of debt they owe. Under such circumstances, the consumer will usually file for Chapter 11 bankruptcy. Our Oak Park consumer bankruptcy attorneys can provide you with more information. Understanding Debt Limits in Chapter 13 Bankruptcy Cases What are debt limi...