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 » Osenton Says Individuals With High Debt May Wish To Consider Chapter 11

Osenton Says Individuals With High Debt May Wish To Consider Chapter 11

When considering personal bankruptcy, most people consider Chapter 13 and, even more so, Chapter 7. But there is another popular chapter, too: Chapter 11.

“Although originally intended for businesses, individuals can be required to file for this chapter if their debt exceeds the limits of Chapter 13 bankruptcy,” said Reginald Osenton of Olivero Laws in Brandon, Florida.

Currently, the limits of Chapter 13 bankruptcy are $1,081,500 for secured debt and $360,525 for unsecured debt. The threshold changes every three years in proportion to the Consumer Price Index.

Chapter 11 bankruptcies can be more advantageous in some cases for individuals. Here are some examples of how:

-Chapter 11 has no debt limits, unlike Chapter 13. As more and more consumers have taken advantage of larger amounts of credit that are being extended, this is an important point.

-Chapter 11 gives the debtor more freedom because there usually is no trustee appointed. This also saves the cost of having to pay for a trustee. There is also more flexibility with proposing a repayment plan.

-Debtors have the ability to modify their secured debts. With Chapter 13 cases, it is necessary to wait a certain length of time before the loan of an item can be reduced to the current value of the product. But with Chapter 11, there is no time limit. So that motorcycle that was purchased 14 months ago and is currently worth less than its loan? It can be reduced to the bike’s present worth.

For Businesses

Chapter 11 bankruptcy is also used by businesses. When a company is going out of business, Florida law provides a process for liquidation. But in the case of businesses that want to continue operating, Chapter 11 can help.

“Chapter 11 helps a business restructure its secured debts so they sometimes are extended and lowered. Also, there are no debts that are considered dischargeable,” Osenton said.

For individuals who are considering filing for Chapter 11 for business or personal reasons, or for information on another form of bankruptcy, it is important to speak with an experienced attorney who can answer any pertinent questions.

To learn more visit, http://www.brandonlawoffice.com.

Posted on Wednesday, December 1st, 2010 at 8:00 pm under News and Press.
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