A typical individual Chapter 11 client is one who falls into one of four categories:
- An individual who has a lot of complex, usually business-related debt but also a lot of assets and/or high income, which can be used to fund or otherwise support a Chapter 11 Plan
- An individual who does not fall within certain parameters required for Chapter 7 or Chapter 13 bankruptcy
- An individual with a business that could be disrupted by a Chapter 7 bankruptcy
- An individual who needs to reorganize debt but who also needs greater flexibility in order to accomplish his or her goals.
The process of filing a Chapter 11 bankruptcy case and obtaining confirmation of the debtor’s Chapter 11 Plan can be quite complex and costly. Accordingly, most Chapter 11 bankruptcy cases are filed by business entities. However, individuals are not precluded from seeking Chapter 11 relief, and in appropriate cases – usually involving individuals with large liabilities or engaged in complex business dealings – Chapter 11 bankruptcy may be the best solution for an individual with financial problems.
By and large, chapter 11 is a type of bankruptcy reserved for business and corporate reorganizations. Chapter 11 shares many of the qualities of a chapter 13, but tends to involve much more complexity on a much larger scale.