Key Takeaways

• Chapter 13 has debt limits. As adjusted on April 1, 2025, they are $526,700 in unsecured debt and $1,580,125 in secured debt. Above either figure, Chapter 11 is the reorganization option.
• You stay in possession of your property and run your own affairs. No trustee takes over in an ordinary case.
• An individual whose debts are mainly business debts and fall under the Subchapter V limit can use that faster, less expensive form of Chapter 11.
• Chapter 11 costs more and demands more reporting than Chapter 13. It is worth it when the debt or the assets leave no other workable choice.

Who Files an Individual Chapter 11

• Owners with personal guarantees. A failed or struggling business can leave the owner personally liable for far more than Chapter 13 allows.
• Real estate investors. Several mortgaged properties can put secured debt over the Chapter 13 limit. Chapter 11 can restructure the loans on investment properties.
• High earners. Physicians, executives and other professionals whose income rules out Chapter 7 and whose debts are too large for Chapter 13.
• People with assets to protect. Someone with substantial non-exempt property who would lose it in Chapter 7 and can instead pay creditors over time.
• People without the regular income Chapter 13 requires. Chapter 11 plans can be funded by asset sales, refinancing or irregular income.

In September 2026 Congress passed the Bankruptcy Threshold Adjustment Act of 2026 (H.R. 7730). It would replace the two Chapter 13 limits with a single limit of $2,750,000 and raise the Subchapter V limit to $7,500,000. As of October 1, 2026 the bill was awaiting the President’s signature and was not yet law. We confirm the limits in effect on the day you file.

How an Individual Chapter 11 Works

• Filing and the automatic stay. Foreclosures, lawsuits, garnishments and collection calls stop when the case is filed.
• Debtor in possession. You keep your property and manage your finances, subject to court supervision. You open a new bank account, file monthly operating reports and need court approval for transactions outside the ordinary course.
• The plan. You propose how each class of creditors will be paid. Creditors vote on it.
• Confirmation. The court approves the plan if it meets the legal tests, including that creditors receive at least what they would in a Chapter 7 liquidation.
• Payments and discharge. In an individual case, the discharge generally comes when plan payments are completed, not at confirmation.

What a Plan Can Do

• Reduce a loan secured by investment real estate or other collateral to the value of the property, and repay it on new terms. The mortgage on your principal residence generally cannot be reduced, but arrears can be cured over time.
• Stretch tax debts and other priority claims over a period of years.
• Pay unsecured creditors a portion of what they are owed from your disposable income.
• Sell property in an orderly way, at a fair price, without the pressure of a foreclosure date.
• Reject burdensome leases and contracts.

Traditional Chapter 11 or Subchapter V

An individual engaged in business whose debts are at least half business debts, and whose total debt is under the Subchapter V limit, can elect Subchapter V. The differences are significant. In Subchapter V, unless the court orders otherwise, there is no creditors’ committee and no separate disclosure statement. There is no quarterly fee to the United States Trustee, and you can keep your property without paying unsecured creditors in full as long as you commit your projected disposable income for three to five years. In a traditional individual Chapter 11, creditors have more leverage over what you keep. If you qualify for Subchapter V, it is almost always the better route. See our Subchapter V page.

Chapter 11 Compared With Chapter 7 and Chapter 13

Chapter 7 is faster and cheaper, and it discharges most unsecured debt in a few months, but a trustee sells non-exempt property and high-income consumer debtors may not qualify. Chapter 13 lets you keep property and pay over three to five years, with lower cost and less reporting than Chapter 11, but only if your debts are under the limits and you have regular income. Chapter 11 has no debt ceiling and the most flexibility, at higher cost. We compare all three with your actual numbers before recommending one. Read more about Chapter 11.

What Our Firm Does

• Total your debts by type to see which chapters are open to you.
• Value your property and apply the exemptions available in your state.
• Deal with guarantee creditors, mortgage lenders and taxing authorities.
• File the case and the motions needed at the start.
• Prepare the monthly reports and the plan, and see the plan through confirmation.

Frequently Asked Questions

Can an individual really file Chapter 11?

Yes. The Bankruptcy Code allows individuals to file Chapter 11, whether or not they own a business.

Will I lose my house?

The purpose of a reorganization is to let you keep property while paying creditors over time. You must stay current on the mortgage going forward and cure any arrears through the plan. Creditors must also receive at least what they would get if your non-exempt property were liquidated.

How long does the plan last?

Individual plans commonly run five years. Subchapter V plans run three to five years.

Is Chapter 11 more expensive than Chapter 13?

Yes. The filing fee is higher, the case requires monthly reports and more court filings, and the legal work is greater. We give you a fee estimate before you decide.

I am over the Chapter 13 limit because of a business guarantee. What should I do first?

Collect the loan documents and guarantees and find out the current balances. Whether the guaranteed debt is fixed in amount, and whether the business will pay part of it, affects which chapter you can use. See our page on personal guarantees and SBA loans.

Find Out Which Chapter Fits

Email msiddons@siddonslaw.com with a rough total of your debts, your income and the property you want to keep. We will reply with the list of documents we need. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.