An individual does not usually choose to file a Chapter 11 bankruptcy. If they do choose to file for Chapter 11 it is because they do not qualify for a Chapter 7 or a Chapter 13 bankruptcy. The reason it is less popular is that a Chapter 11 bankruptcy is a more complicated bankruptcy and therefore the attorney’s fees are much higher.
In addition to attorney’s fees, the following fees must be paid in a Chapter 11 bankruptcy.

Filing fee of $1,738.00
Quarterly fees paid to the U.S. Trustee; and
The cost to prepare and mail your plan of reorganization, disclosure statement and creditor voting ballots.

In certain situations, Chapter 11 bankruptcy might still be the right choice, for example when you don’t qualify for a Chapter 7 bankruptcy because your disposable income is too high under the means test, and when your debts exceed the Chapter 13 bankruptcy limits. As of April 1, 2025, Chapter 13 debt limits are $1,580,125 of secured debts (such as mortgage or car debts) and $526,700.00 of unsecured debts (debts that are not secured by any property, such as most credit card debts and medical debts).
How Does Chapter 11 Bankruptcy Work?
A Chapter 11 bankruptcy case begins when a petition is filed with the Bankruptcy Court. As soon as your bankruptcy petition is filed, you immediately get the benefit of the “automatic stay”. The automatic stay is an order prohibiting your creditors from taking collection actions against you. All debt collection actions including lawsuits, garnishments and foreclosures are suspended by the automatic stay, giving you time to negotiate with your creditors on a repayment plan. The automatic stay continues until the court approves your plan of reorganization.
Preparing Your Plan of Reorganization
A Chapter 11 reorganization plan is a document designed to solve your unique financial problems. The Chapter 11 debtor (the person who files the bankruptcy) proposes a plan that preserves their most important assets while allowing them to use their available income to pay their debts over time.
Voting and Confirmation of Your Plan
Once the plan is filed with the Court, your creditors will then vote on whether they want to accept or reject it. Not all creditors will agree. Sometimes, a reluctant creditor won’t agree to a reasonable restructure of its claim and will vote “no” on the plan. When that happens it might still be possible to “cram down “ a plan over the creditor’s objections, by convincing the judge that the proposed treatment of that creditor’s claim is fair and reasonable.
To be confirmed (approved by the court), a Chapter 11 plan must be accepted by at least one-half of the number of creditors in each class of claims, and two-thirds of the dollar amount of claims in each class. Once accomplished, the court issues an order confirming your plan of reorganization.
Discharge of Your Debt
The goal of the Chapter 11 plan is for you to get a discharge of all remaining debts. The timing of the discharge is set out in the plan. If you do not complete the agreed upon plan, however, then you remain responsible for the balances on any outstanding obligations.
Discuss Your Financial Situation with Our Attorneys
Chapter 11 is a very complex area of law. If you are a high-income debtor with significant assets, or if you exceed the debt limits of Chapter 13 bankruptcy, you may want to consider filing Chapter 11 bankruptcy. Take the time to talk to an experienced bankruptcy attorney at Levitt & Slafkes about how Chapter 11 bankruptcy can work for you. Contact us at 973-323-2953 to schedule an initial consultation, or contact us online.
We are proudly designated as a debt relief agency by an Act of Congress. We have proudly assisted consumers in filing for Bankruptcy Relief for over 30 years.The post What is an Individual Chapter 11 Bankruptcy? first appeared on Levitt & Slafkes, P.C..