In Chapter 11, can we still discharge unsecured debts like a chapter 13? 10 Answers as of July 11, 2013

I ran a company and had personally guaranteed over $1M in corporate debt and the company went south. We have a $1M 1st and $250K 2nd on a house worth about $975K. We've landed on our feet (well, one foot) and she's now got a job at $85K and I've been getting consulting work - averaging about $10K a month. Definitely can survive but still can't afford to pay our debts. In Chapter 11, can we still discharge unsecured debts that are beyond our means, the way you can in Ch 13? Can we lien strip the 2nd since there's no equity? Would the trustee suck any consulting income and distribute to creditors the way they do in 13?

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Theodore N. Stapleton, PC
Theodore N. Stapleton, PC | Theodore N. Stapleton
In a chapter 11 proceeding the post petition income in property of the estate and will determine how much you can pay unsecureds. The second mortgage is unsecured and would recieve the same payments as other unsecureds.
Answer Applies to: Georgia
Replied: 7/25/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
An 11 can be like a chapter 13 in many ways. Unsecured debt can be discharged, you will have to pay to the extent you have the ability. Do not try this on your own.
Answer Applies to: California
Replied: 7/22/2011
Law Office of Harry L Styron
Law Office of Harry L Styron | Harry L Styron
You can do everything in an individual 11 that you can in a Chapter 13, but it is just a lot more work. You operate as debtor in possession, but must file monthly operating reports with the U.S. Trustee. There is in the works in the Northern District of California, but not yet out, a simplified combined plan/disclosure statement, which should substantially reduce costs, but it is routine to reach $15-25K in fees. Court filing fee is $1,000+ and you pay the U.S. Trustee a quarterly fee based on the size of the estate . . . assuming the low end about $500 per quarter. Your banks will force closure of all your accounts as of the date of the Petition, and open new accounts tagged "Debtor in Possession. You generally wind up with a 5 year plan, at the completion of which your unsecured debt is discharged, but the U.S. Trustee will insist that your disposable income less allowed expenses be allocated to the plan payments.
Answer Applies to: California
Replied: 7/22/2011
Mauritz Van Niekerk, Attorneys at Law
Mauritz Van Niekerk, Attorneys at Law | Christiaan van Niekerk
Why are you looking at a C 11 if the company is gone? You can do a personal C 7 or C 13 and that will help you out
Answer Applies to: New York
Replied: 7/22/2011
Rosenberg & Press
Rosenberg & Press | Max L. Rosenberg
You need a qualified attorney. The fact that you are asking about a Chapter 11 with regards to your personal debt is a clear indicator that you need an attorney. 11 is for the reorganization of a business. Now perhaps a Chapter 7 bankruptcy may suit you, but from the few details given in your question, you do not want an 11. T
Answer Applies to: Connecticut
Replied: 7/22/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    I know nothing about Chapter 11. Sorry. Please resubmit with a specific request for a Ch. 11 atty.
    Answer Applies to: Virginia
    Replied: 7/11/2013
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Unsecured debts can be discharged in a confirmed chapter 11 plan. Like chapter 13 a junior lien on your residence can be stripped if there is no equity beyond the first mortgage. Ordinarily there is no trustee appointed in chapter 11. However, chapter 11 is the most complicated kind of bankruptcy. The up front retainer fee is high, perhaps $15-25,000. In many small cases, therefore, chapter 11 isn't really available as an alternative.
    Answer Applies to: California
    Replied: 7/22/2011
    Eric J. Benzer, Attorney at Law
    Eric J. Benzer, Attorney at Law | Eric Benzer
    Often times, yes.
    Answer Applies to: Maryland
    Replied: 7/22/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    A debtor may be able to eliminate a lien through a chapter 11 or chapter 13 plan to the extent the lien is "out of the money", meaning there is no value (after senior liens and property taxes) to secure the amount owed to the lienholder. Note that the procedure varies from district to district of the bankruptcy courts. While you may not have considered it, a Chapter 7 MIGHT work with your numbers, given the large secured debt. (You may "pass" the means test you thought you failed). While a Chapter 7 does not allow a lien strip, you may be able to discharge all the unsecured debt. See a lawyer to evaluate the pros and cons of your options.
    Answer Applies to: Georgia
    Replied: 7/22/2011
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