Introduction

• Jurisdiction: United States

Introduction

When it comes to chapter 11 bankruptcy cases, most practitioners envision insolvent business entities. But this is not always the case. While the majority of chapter 11 bankruptcy cases involve corporate debtors, a recent study found that "[i]ndividuals account for more than a quarter of chapter 11 bankruptcy filings, and this share has grown over time."¹

Although most individual debtors who restructure their debts file for bankruptcy under chapter 13, certain debtors possess characteristics that make chapter 11 a more attractive option. For example, "Chapter 11 debtors are much more likely to operate a business, and they have dramatically higher debt-to-income ratios than other consumer debtors."² Considering these qualitative characteristics, the unique features of a chapter 11 bankruptcy are often a better fit for certain debtors. For example, some debtors may require the increased debt limit encompassed in a chapter 11 proceeding...