Not every individual debtor should consider filing for bankruptcy relief under Chapter 11 without speaking first with a knowledgeable bankruptcy attorney. Arizona individuals, more often than not, tend to look for debt relief under Chapter 7 (liquidation) or Chapter 13 (individual debt adjustment) as their only options. But for those individual debtors who have significant equity in real property with minimal income (or perhaps no income), Chapter 11 (reorganization) may be an excellent alternative.
What Individuals Need to Know about Chapter 11 Bankruptcy
Attorney Lawrence ‘D’ Pew explains to potential Chapter 11 debtors (who have plenty of equity in real property, but poor cash flow) that they can benefit from the way in which a Chapter 11 bankruptcy is funded. Generally, the individual’s Chapter 11 bankruptcy will involve collecting proceeds from the sale of the debtor’s real property. So the debtor is given valuable time to sell assets to pay off his or her debts. Payments under the debtor’s confirmed Chapter 11 plan are ordinarily made from the sale proceeds. Furthermore, the individual debtor may not be required to make any payments prior to confirmation of the Chapter 11 plan. Depending upon the debtor’s equity in the subject property, even mortgage payments may be delayed, giving the debtor more time to recover fiscally.
From the Pew Law Center’s Bankruptcy Attorney: Arizona Chapter 11 Fees are Higher
Says Lawrence ‘D’ Pew, bankruptcy attorney, Arizona Chapter 11 court filing fees are higher than with a Chapter 7 and Chapter 13 petition. Here is a comparison of the current filing fees:
• Not including the legal fee charged by your bankruptcy attorney – Arizona Chapter 7: $299.
• Not including the legal fee charged by your bankruptcy attorney – Arizona Chapter 13: $274.
• Not including the legal fee charged by your bankruptcy attorney – Arizona Chapter 11: $1,390.
Filing for bankruptcy protection and debt relief under Chapter 11 generally costs more in attorneys’ fees as well. The legal preparation required will be explained in detail when you meet with your bankruptcy attorney. Arizona Chapter 11 cases are more complex and require greater attorney involvement throughout the process, more so than with other chapter filings under the U.S. Bankruptcy Code. Despite the additional expense, Chapter 11 is often the best option for individual debtors who own plenty of real property, but have a minimal cash flow.
Pew has been an awesome firm to work with. They are very sensitive, even through a bankruptcy that was complicated by a decision to divorce in the middle of it. They are rofessional and efficient, but equally personable and a joy to work with. I could not ecommend them more highly!
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