• When your debt is excessive, bankruptcy can help you regain control of your finances.Debt concept - cutting a credit card image by Sophia Winters from Fotolia.com
  
  Bankruptcy is a way for an individual or corporation to have debts restructured or discharged. Chapter 7 and Chapter 13 bankruptcies are the most common types. However, individuals may choose Chapter 11 bankruptcy if they do not want to liquidate assets, as is required by Chapter 7 bankruptcy. According to the Moran Law Group, if an individual has more than $1,010,650 in secured debt or $336,900 in unsecured debt, he doesn't qualify to file for Chapter 11 bankruptcy and may file Chapter 13 instead.
  
  

Petition

• Chapter 11 bankruptcy is filed through the court system by an individual debtor. When the debtor files a voluntary petition for bankruptcy, she must include financial statements, including income and expense, assets and liabilities, lease documents and a certificate to show completion of credit counseling.
  
  If the debtor has 12 or more debts with different creditors, three or more of the creditors may file an involuntary petition for Chapter 11 bankruptcy against the debtor if they hold at least $10,000 of unsecured debt. Upon notification that involuntary bankruptcy has been filed, the debtor has 20 days to dispute the filing with the court, requiring the creditors to prove the debt and the debtors failure to make payments. If the debtor does not file a dispute or if the court rules in favor of the creditors, the bankruptcy will continue in the same manner as a voluntary bankruptcy.
  
  

Stay

• When you file for Chapter 11 bankruptcy, an automatic stay on your debts is issued. During this time all collection efforts must cease. In cases of secured debt, the creditor may petition the court to lift the stay so he can sell the property.
  
  

Assets and Payments

• According to the U.S. Bankruptcy Court, within 120 days of filing, the debtor must submit a plan to the courts of how and how much he intends to pay his debts. The creditors will vote to approve the plan. A Chapter 11 case is not closed until a plan is accepted by the creditors. In most cases, the debtor will be permitted to retain his property; however, plans that include liquidation of assets are allowed.
  
  

Discharged Debts

• Not all debts may be discharged or reorganized. Child support and alimony payments, taxes, some education loans and debts related to criminal restitution may not be discharged under Chapter 11 bankruptcy.