In a Chapter 13 bankruptcy, the debtor may not have over certain amounts of secured and unsecured debts. Today, homes are so underwater there are huge potential unsecured deficiencies and small businesses are failing, which most business owners have personally guaranteed. If the majority of a debtor’s debts are business related and/or they are under the median income in Florida they may qualify for a Chapter 7 bankruptcy. However, if they do not otherwise qualify for a Chapter 7 because they make too much money or have large un-exempt assets, their only option may be a Chapter 11 bankruptcy. Unfortunately, however most bankruptcy lawyers will not accept less than a $20,000 or $30,000 retainer to undertake a Chapter 11 and the fees go up from there. If the debtor cannot afford a Chapter 11 bankruptcy they may be forced to face creditors in state court and work out judgments on their own.

This seems somewhat unfair because bankruptcy is a constitutional right that truly assists individuals facing the pressures of pre-existing debt. There are also things that can be done in bankruptcy such as cramming down investment property that cannot be done otherwise. The moral of this blog: If you have large unsecured and/or secured debts and you see that you financial situation is deteriorating seek the advice of bankruptcy counsel immediately. Although it is very costly to file a Chapter 11 bankruptcy it may be money well spent but you need to seek protection prior to running out of funds.