Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “What is Chapter 11 Bankruptcy?”
Former NFL player Vince Young recently filed for bankruptcy in Texas but is handling his case differently than many others who seek personal bankruptcy protection. The former Titans player chose to file under Chapter 11 rather than the much more common Chapter 13 or Chapter 7.
So why did Young choose Chapter 11? Experts say there are likely several reasons. First, under a Chapter 11, Young will have the authority to reorganize his debts and begin making new payment arrangements without having to do so under the strict supervision of a court-appointed bankruptcy trustee. Though debtors are still permitted to object to Young’s plan, under a Chapter 11 he will have much more flexibility when handling the reorganization.
Additionally, most people say that based on his preliminary filings, his case would be too large to file under a Chapter 13. This would mean that Chapter 7 would be his only other option, something that would put far more power in the hands of a trustee. Under Chapter 7, the trustee would make decisions regarding which assets should be sold and how creditors would be paid, with Young’s wishes taking a back seat. Under Chapter 11, Young will stay in the driver’s seat.
This is because Chapter 11 bankruptcy filings are more about allowing reorganization rather than trying to save someone who is totally wiped out. If you’re unable to file for a Chapter 13 and still want to have some control over paying off creditors and keeping certain assets, then a Chapter 11 becomes your only other option.
Though it may come as a surprise to many people, it’s true that certain types of bankruptcy have limits on the amount of debt a person can have. Though Chapter 13 bankruptcies are great options for those who qualify, some people who have debts that are too high may be unable to seek protection under Chapter 13. As of April 2013, a person must have less than $383,175 in total unsecured debts and less than $1,149,525 in secured debts to qualify for a Chapter 13.
Unsecured debt refers to many common types of debt, including credit cards, medical bills, utility bills and rent. These debts are ones where no collateral was put up to secure the loan. Secured debts are those where a person uses property as a basis to obtain the loan and if the debtor fails to pay the loan, the lender is allowed to then take the property.
In Young’s case, his debts were simply too high to qualify for a Chapter 13 which meant he had to go looking at other avenues to handle the restructuring of his debts. If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC today at (704) 370-2828. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.
About The Author:
Bryan Stone is a Partner with Arnold & Smith, PLLC where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord tenant issues. Originally from Macon Georgia, Mr. Stone attended the University of Georgia for a BBA in Banking and Finance and went on to Wake Forest to earn his law degree. After law school Mr. Stone relocated to Charlotte where he has become quite involved in many local organizations. He is currently the Chair of “Bravo!” the young professionals organization of Opera Carolina, he also founded the UGA Alumni Association of Charlotte. In his spare time he enjoys perfecting his BBQ skills for the annual “Q-City BBQ Championships” and playing softball with the Mecklenburg County Bar Softball League.
“Vince Young Files for Chapter 11 Bankruptcy” By Mike Chiari , bleacherreport.com
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