If you feel like you are drowning in debt and it is preventing you from moving forward in life, filing for bankruptcy may be the answer. You can get relief from collection efforts while still retaining your home and other vital assets.

Contact our Madison Chapter 11 personal bankruptcy lawyers if you have significant debt and cannot see a clear path out. Our hardworking bankruptcy attorneys will evaluate your situation and present all possible options to achieve your goals. Whatever you decide, we will advocate for your rights and walk alongside you in this process.

Individuals and Couples Can File Under Chapter 11

Many companies seek protection from creditors while they reorganize by filing for a Chapter 11 bankruptcy, leaving many people with the impression that this chapter is only for businesses. That is not true. Although other forms of bankruptcy are often available to personal debtors, individuals and married couples who do not qualify for protection under other forms can get creditor protection and discharge some debt by filing a Chapter 11 bankruptcy.

A Chapter 7 bankruptcy requires a means-test and is unavailable to people with substantial income or assets. Similarly, a Chapter 13 bankruptcy is only for individuals or married couples with less than $2,750,000 in debt. In contrast, a Chapter 11 does not impose income or debt limits.

Our Madison Chapter 11 personal bankruptcy lawyers will discuss your situation and explore whether alternatives can offer relief. If you choose this route, we will manage the filing and work with you to set up the proper plan of reorganization.

How a Chapter 11 Reorganization Works for an Individual or Couple

If you file for a Chapter 11 bankruptcy as an individual or couple, your creditors must stop contacting you directly. In addition, if you have a property in foreclosure, or a creditor is attempting to repossess it, those efforts must cease.

Within 120 days of your bankruptcy filing, you must provide a proposed plan of reorganization describing how you will pay your creditors. The plan must address payments to each class of creditor, including:

  • Creditors with collateral, called secured creditors
  • “Priority Creditors,” meaning tax authorities, spousal support, child support, student loans, and damages for personal injury lawsuits
  • Unsecured debt, such as credit cards, utilities, and medical bills

The plan of reorganization cannot extend longer than five years for an individual or married couple. Additionally, the creditors must vote to accept your plan or propose one that is agreeable to them. The Chapter 11 attorneys in our Madison office are skilled at negotiating with creditors to arrive at a reasonable restructuring arrangement.

Once the creditors and the Bankruptcy Court have accepted the plan, you must pay your creditors as agreed throughout its term. At the end of the reorganization period, the remaining unsecured debt can be discharged.

Initiating a Chapter 11 Bankruptcy

Filing for a Chapter 11 bankruptcy in Madison requires preparation. Before you can do this, you—and your spouse, if you are filing jointly—will complete at least six months of credit counseling, and you can attach any debt of reorganization plan you created while working with the counselor.

The law at 11 United States Code § 521(B) requires a debtor to file detailed financial information with the disclosure, including:

  • A list of creditors
  • All assets and liabilities
  • Income from all sources
  • Expenditures
  • A statement explaining any anticipated increases in income or expenditures over the next year

The disclosure’s accuracy is critical. Information from it will inform the plan of reorganization that governs your bankruptcy. Filing an inaccurate disclosure can lead to rejection of your Chapter 11 petition.

Our Chapter 11 bankruptcy lawyers will work with you to compile the information for your filing and ensure its accuracy and completeness. Investing in thorough preparation reduces the likelihood of delays once the Chapter 11 proceedings are underway.

Talk to Our Madison Attorneys About Personal Bankruptcy Under Chapter 11

Bankruptcy can be liberating, but it is a big step with many factors to consider. Before proceeding, it is essential to thoroughly understand the process. Our Madison Chapter 11 personal bankruptcy lawyers can review your situation and explore all the alternatives. If filing for a Chapter 11 bankruptcy is the best option, we will be knowledgeable and reliable advocates as you begin your plan of reorganization.

Do not let debt overwhelm you. Schedule a complimentary case review today with an experienced, dedicated team member at Gillman, Bruton & Capone.