Ft. Lauderdale Bankruptcy Attorney

Chapter 13 vs. Chapter 11 (debt limitation)

Under a Chapter 13 bankruptcy, individual debtors are allowed to reorganize their debts under the supervision of the federal bankruptcy court. Chapter 13 bankruptcy is reserved for those debtors whose income is too high for the limits under a Chapter 7 debt liquidation bankruptcy. However, Chapter 13 bankruptcy has debt limitations. For those debtors who carry too much debt, they will be advised by a Ft. Lauderdale bankruptcy attorney to file a Chapter 11 bankruptcy instead.

Chapter 13 Debt Limitations

Some debtors (especially those with less debt and/or lower income) may have a choice between a Chapter 7 or Chapter 13 bankruptcy. On the other hand, debtors whose debt exceeds the limitations of a Chapter 13 are not allowed to file and are redirected to their last option, and that is a Chapter 11. Although a Chapter 11 is most commonly used by businesses and corporations, individuals who do not qualify for a Chapter 13 have Chapter 11 as a reasonable alternative.

The United States Code sets forth debt limits for individual debtors to be eligible to file under a Chapter 13 of unsecured debt less than $360,475.00 and secured debt less than $1,081,400.00. As you can see, it's not difficult in this day and age to have secured debts above the million dollar threshold, especially if you own valuable real estate. If your debts exceed the limitations of a Chapter 13 bankruptcy, an attorney from Brown, Van Horn P.A. can provide you with the information you need to make the decision that is best for you.

Ft. Lauderdale Bankruptcy Lawyer

Both Chapter 11 and Chapter 13 debt reorganization bankruptcies have key similarities as to their purpose and function. In both cases the debtor gets to enjoy the benefit of the "automatic stay" which puts a halt to all debt collection activity during the bankruptcy process. What sets the two apart in particular is the debt limitations. If your debts fall below the limits, then you will most likely be eligible for a Chapter 13 bankruptcy, whereas if your debts are above the limits, then you will have to file a Chapter 11 bankruptcy.

In both bankruptcies, your attorney will create a debt reorganization plan that will allow you to consolidate your debts into a payment you can manage. Under a Chapter 11, the creditors' votes will determine whether the plan is accepted or rejected. You may have to come up with a new plan or the judge could force the creditors to accept the proposed plan. In order to have a positive experience filing bankruptcy, contact a seasoned Ft. Lauderdale bankruptcy lawyer from our firm to learn more about all of your alternatives to bankruptcy as well as your bankruptcy options.

Contact a Ft. Lauderdale bankruptcy attorney from the firm to schedule an initial case evaluation.