Raleigh Bankruptcy

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The Debtor

The Debtor is the person or entity that is the subject of a bankruptcy case. It is important to keep in mind that a person or entity files bankruptcy — you do not file bankruptcy against a particular debt. All liabilities and all assets are the subject of the bankruptcy proceeding. It is the attorneys role to explain to their clients how bankruptcy will impact all of their various assets and liabilities.

Section 109 of the Bankruptcy Code details who can be a debtor under the various bankruptcy chapters. An individual can be a Debtor in Chapters 7, 11, 12 and 13. As a practical matter, however, most individuals file bankruptcy under either Chapter 7 or Chapter 13.

Who May Be a Debtor under Chapter 13?

1. Only Individuals with Regular Income.

* Only Individuals, Including Sole Proprietorships (Not Corporations).

* Regular Income, Can Be from Any Source (e.g., a Job, Gifts, Unemployment Benefits).

2. Secured Debt of less than $1,149,525 and Unsecured Debt of less than $383,175 .

* Limits Applied Only to Debts That Are Noncontingent and Liquidated.

* Limits Apply to Each Debtor Individually in Joint Cases.  (As long as each spouse qualifies separately under the limits, they are eligible to file jointly even if the debts of both spouses would exceed the limits).

Who May Be a Debtor under Chapter 7?

1. Individuals, Married Couples, Partnerships and Corporations.

2. No Debt Limits.