Individual Chapter 11

Individual Debtor Chapter 11 Cases After the BAPCPA

Cristina Lipan, April 28, 2010

© All Rights Reserved.

I. Introduction

There has been a large rise in Chapter 11 bankruptcy filings in the past two years,[1] and this is attributable in large part to the economic crisis.[2] The past year saw 210 chapter 11 filings of public companies, the highest since the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005[3] (“BAPCPA”).[4] However, the number of individual debtor chapter 11 filings far exceeds those of public companies.[5] Nonetheless, it has been difficult for an individual debtor to file chapter 11, and since the BAPCPA changes in 2005, it has become even more so.[6]

Congress’s purpose in enacting the BAPCPA was to key bankruptcy relief to a lack of future income rather than to a lack of current assets.[7] For chapter 7 cases, the means test was implemented, which looks at the future income of debtors to determine whether there is a presumption of abuse.[8] This was intended for the “super-rich” who could afford, from future income, to pay off debts.[9] Likewise, it can be assumed that the individual debtor chapter 11 provisions were added for the same purpose and to ensure there was no escape from the means test requirement of chapter 7.[10]

II. BAPCPA Changes to Individuals Filing Chapter 11 Bankruptcy

The BAPCPA has not made many changes to individual debtor chapter 11 cases, but the changes it did make are significant[11] and have made an individual debtor’s case under chapter 11 more difficult.[12]

1. Post-Petition Earnings from Services are Property of the Estate and Used to Fund the Plan

The BAPCPA added section 1115 to the Bankruptcy Code, which designates post-petition earnings from services as included in the property of the estate.[13] This is because the property is necessary to “fund or otherwise implement a plan of reorganization.”[14] This property is also protected by the automatic stay,[15] even from post-petition claims.[16] The property that is included in the estate under section 1115 does not need to be listed in the debtor’s schedules, because it would be impracticable to require the debtor to continually amend the schedules as he receives these earnings.[17] Also, under section 1115, the debtor may remain in possession of this property, which is obviously an advantage to the debtor.[18] The BAPCPA also added section 1123(a)(8) to the Bankruptcy Code, which mandates that the individual debtor’s post-petition earnings are used, as necessary, to fund the chapter 11 plan.[19]

2. The Disposable Income Requirement

Under section 1129(a)(15), Chapter 11 debtors may specify under the plan that all unsecured claims will be paid, either in full, or an amount equal in value to the projected disposable income of the debtor, “during the 5-year period beginning on the date that the first payment is due under the plan.”[20] Section 1129(a)(15) refers to chapter 13 for the definition of “disposable income,”[21] which is the “current monthly income received by the debtor” less reasonable expenses.[22] There is no minimum time period for the plan; the plan can be less than five years.[23] However, the amount to be paid under the plan cannot be less than the projected disposable income during that five year period.[24] Additionally, unlike chapter 13 plans,[25] section 1129(a)(15) allows for longer plan periods.[26]

3. Delayed Date of Discharge and Plan Modification

The BAPCPA also changed the date on which an individual chapter 11 debtor could receive a discharge.[27] Prior to 2005, the debtor would receive a discharge at plan confirmation, without regard to whether any payments had been made,[28] with the goal of closing an individual chapter 11 case earlier rather than later.[29] The changes made by the BAPCPA, however, do not conform with the idea that these cases should be closed earlier.[30] Post-BAPCPA, property of the estate includes the post-petition earnings of the debtor,[31] which may be used, as necessary, to fund the plan.[32] However, section 1141(d)(5) changes the date of discharge to when all payments under the plan are completed,[33] thereby delaying discharge.[34]

The delayed discharge also has an effect on the terms of modification, because if assumptions made at confirmation end up being wrong, the plan will need to be modified in order for the debtor to get a discharge.[35] In response, the BAPCPA added section 1127(e), which allows individual debtors to modify the plan to increase or reduce payments and to modify the repayment periods under the plan, as long as other confirmation requirements are met.[36] This may also delay an individual debtor’s discharge under chapter 11.[37]

III.  The Effects of the BAPCPA Changes on Individual Chapter 11 Cases

A. Issues During the Administrative Period

There are issues as to what happens during the administrative period – the time between filing the case and confirming a plan.[38] Although the BAPCPA addressed some of these issues, the changes may have made these problems worse.[39]

Unlike chapter 13,[40] chapter 11 does not require that a plan be filed within any specific time period, but provides for conversion or dismissal if a confirmable plan is not filed within a reasonable time.[41] As a result, there will often be a large time gap between the commencement of the case and plan confirmation.[42] The problem is that post-petition income is part of the bankruptcy estate, but section 1115 does not provide for how that income can be spent during the administrative period.[43]

The particular issue arises because these are individuals who need to use the income for living expenses.[44] Although the “actual, necessary costs and expenses of preserving the estate” are administrative expenses,[45] and could be paid in the ordinary course, there are many personal expenses that do not fall into this category.[46] Therefore, if these living expenses are not administrative expenses, there is no authorization for the debtor to use post-petition income to pay for them, and the amounts could possibly be recovered under the trustee’s avoidance powers.[47]

The payment of the debtor’s attorney during the administrative period raises the same issue.  In a chapter 13 case where the debtor is an individual, “the court may allow reasonable compensation to the debtor’s attorney for representing the interests of the debtor.”[48] However, there is no such provision that applies to individual debtors in a chapter 11 case.[49] Therefore, payment of attorneys is governed by section 330, which allows for “reasonable compensation for actual, necessary services rendered by . . . [an] attorney . . . employed under section 327.”[50] Section 327 allows for the employment of an attorney that does not “hold or represent an interest adverse to the estate.”[51] This does not include legal representation that is for the benefit of the debtor, such as “advice as to exemptions, or advice on plan structuring.”[52] Since section 1115 makes post-petition earnings property of the estate,[53] the chapter 11 individual debtor may not be able to obtain representation for his own benefit, without using property of the estate to pay for it.[54]

In In re Goldstein & Goldstein,[55] the court addressed this issue, where joint debtor spouses were going through a divorce, and needed their post-petition earnings to pay for their divorce counsel.[56] The court said that section 1115(a) apparently prevented the individual chapter 11 debtors from paying for their divorce, although preventing a debtor from retaining counsel for a divorce was not one of the purposes of bankruptcy.[57] However, the court further explained that if the joint petition created two, rather than one, bankruptcy estate, then paying divorce counsel would be in the best interest of each debtor’s respective estate, since the divorce proceedings would require a division of their marital property, which is necessary to dispose of the two estates.[58] Here, the court did find that employment of divorce counsel was in the best interest of the estate.[59]

However, where there is a single debtor and only one possible bankruptcy estate, payment of counsel to represent the debtor would not be in the best interest of the bankruptcy estate, and therefore would not be able to use their post-petition earnings to pay for such representation.[60] Although a chapter 11 individual debtor may try to “obtain sufficient funds” pre-petition to use towards legal services for his own benefit, this “may create causes of action under the avoiding actions, and thus raise questions of disinterestedness.”[61]

Additionally, the BAPCPA made it a cause for dismissal for an individual to fail to pay taxes or to timely file a tax return, and for failure to pay any domestic support obligation that becomes due after filing.[62] Also, failure to keep current on these payments may also preclude confirmation, since taxes and domestic support obligations are priority claims, and therefore subject to a separate confirmation provision.[63]

B. Issues at Confirmation

A requirement for a chapter 11 plan confirmation is that if an impaired class does not accept the plan, then it must be shown that the class will get at least what it could have gotten under a chapter 7 liquidation.[64] This “best-interests” test may be immaterial for individual chapter 11 cases if the debtor has significant post-petition income.[65] Under section 1115, post-petition earnings from services are property of the estate, and are used to fund the plan. However, if the chapter 11 were to be converted to chapter 7, section 1115 would not apply.[66] Under section 348, in converted cases, the estate is deemed to have been created as of the date of the original filing.[67] Section 541 does not include post-petition income as property of the estate for chapter 7 cases.[68] Therefore, the post-petition income that was once part of the chapter 11 estate is no longer part of the chapter 7 estate.[69] However, it is not clear what happens to the post-petition income that was once property of the estate.[70] Section 348(f) essentially says that there is a reversion of the post-petition income to the debtor, but it refers only to cases under chapter 13 that are converted, and does not address cases under chapter 11.[71] For this reason, there is uncertainty about how to calculate the value of the chapter 7 estate and therefore creates uncertainty as to whether the “best interests” requirement necessary for plan confirmation has been met.[72]

Another requirement for chapter 11 plan confirmation is that the “plan has been proposed in good faith and not by any means forbidden by law.”[73] Prior to the BAPCPA, “the focus in individual cases was the devotion of sufficient income to pay creditors.”[74] As good faith is not defined in the Bankruptcy Code, “the term [was] generally interpreted to mean that there exists a reasonable likelihood that the plan will achieve a result consistent with the objective and purposes of the Bankruptcy Code.”[75] So, for example, it would not have been good faith to propose a plan where the debtors retain one hundred percent of the “expenditure needed to support a lavish lifestyle,” while requiring creditors to wait thirty years for payment.[76] The BAPCPA has now created a higher standard for the requirement of good faith.[77] Section 1123(a)(8) requires that the plan pay an amount at least equal to the projected disposable income for the five years beginning on the plan start date.[78] This essentially means that the chapter 11 debtor must devote practically all their service income to the plan, and thus requires more of the chapter 11 debtor than under the pre-BPACPA good faith requirement.[79]

A third requirement to confirming a chapter 11 plan is feasibility, where “[c]onfirmation of the plan is not likely to be followed by the liquidation, or the need for further financial reorganization.”[80] The BAPCPA has made this more difficult for the individual chapter 11 debtor, because although the BAPCPA delayed the date of discharge until completion of the plan,[81] the deadline for filing nondischargeability complaints, which is within sixty days after the section 341 meeting of the creditors, has not changed.[82] This forces creditors to file complaints, and since the plan cannot be confirmed until the feasibility requirement is met, it may cause delays for plan confirmation.[83] In addition, since creditors are under a time constraint, they are filing the complaints just to be on the safe side, and this creates many more instances of complaints to which the debtor must prevail over.[84]

As stated previously, in the case of an individual debtor, plan confirmation requires that if an unsecured claimant objects to confirmation, the plan must provide for at least five years worth of the debtor’s projected disposable income for the five year period beginning on the plan start or the date of the first payment under the plan.[85] However, it is unclear whether this means that all actual income from service be devoted to the plan, or if it be the amount equal to the projected disposable income, which is determined at confirmation.[86]

C. Cram Down for Individual Debtors

A plan can only be confirmed if all the requirements of section 1129(a) are met.[87] Section 1129(a)(8) requires that all impaired classes must have accepted the plan.[88] However, if all the requirements for plan confirmation, other than section 1129(a)(8) are met, the plan can still be confirmed if it “does not discriminate unfairly, and is fair and equitable, with respect to each class of claims or interests that is impaired under, and has not accepted, the plan.”[89] It has been argued that after the BAPCPA, this kind of confirmation may no longer effectively apply to individuals.[90]

The “fair and equitable” language of section 1129(b)(2) has been held to require compliance with the absolute priority rule.[91] This provides that “if the holders of claims or interests in a particular class receive less than full value for their claims or interests, no holders of claims or equity interests in a junior class may receive property under the plan.”[92] If the debtor is a corporation, and there aren’t enough assets to pay the junior classes, such as the equity holders, the class is simply eliminated.[93] However, in an individual chapter 11 case, the equity holder is the debtor himself, and eliminating this equity class is not quite possible.[94] Thus, it has been argued that it may not be possible for an individual chapter 11 debtor to get a plan confirmation without acceptance by all impaired classes.[95]

However, an individual debtor may still be able to comply with the absolute priority rule and cram down through contribution of exempt assets or through loans from family or friends.[96] In In re Gosman,[97] the court held that a debtor cannot comply with section 1129(b)(2)(B)(ii) if he retains his exempt property, because the code does not allow a debtor to retain “any property,” which by its plain meaning includes exempt property, unless all unsecured creditors were paid in full.[98] However, there is concern that applying the absolute priority rule to individual debtors “may prevent an honest . . . Chapter 11 debtor from obtaining effective relief through confirmation of a plan.”[99] The court, although recognizing that this may be poor bankruptcy policy, held that it must comply with the language of the statute, and that policy concerns were an issue for Congress, not the courts.[100]

The BAPCPA addressed this issue with section 1129(b)(2)(B)(ii), which states that an individual debtor “may retain property included in the estate under section 1115.”[101] Section 1115 provides that:

in addition to the property specified in section 541 . . . (1) all property of the kind specified in section 541 that the debtor acquires after the commencement of the case but before the case is closed, dismissed, or converted to a case under chapter 7, 12, or 13, whichever occurs first; and (2) earnings from services performed by the debtor after the commencement of the case but before the case is closed, dismissed, or converted to a case under chapter 7, 12, or 13, whichever occurs first.[102] However, there has been ambiguity as to what “property included in the estate under section 1115” means.[103]

One way to interpret this provision is that the individual debtor could keep all post-petition income from services as long as he meets the projected disposable income test necessary for plan confirmation.[104] However, this means that an individual debtor could keep the income received after the plan’s fifth year,[105] but this is somewhat at odds with section 1123(a)(8), which requires the individual debtor to devote all post-petition income “as is necessary for the execution of the plan” over the objections of a class of unsecured creditors.[106]

Another interpretation is that by allowing a debtor to retain property which is included in the estate under section 1115, the absolute priority rule does not apply to individual debtors.[107] “Although [section] 1115 was added by [the BAPCPA] to include post-petition property and earnings, it also incorporates property of the estate under [section] 541,” and therefore, it can be assumed that a debtor is also entitled to retain property under section 541.[108] The court in In re Tegeder[109] agreed with this conclusion, finding that the absolute priority rule no longer applies to individual debtors who retain estate property under section 1115.[110] However, the plan must still meet the fair and equitable test.[111]

The court in In re Bullard[112] discussed the issue of whether an individual debtor could cram down a chapter 11 plan, where the debtor wanted to retain his exempt property, namely, his post-petition income and an automobile.[113] The court there found that the debtor’s retention of those exempt assets does not violate section 1129(b)(2)(B)(ii).[114] Once a debtor is allowed certain exemptions, the property is no longer property of the estate, and the debtor retains it as a “matter of right.”[115] Therefore, a debtor’s interest in the exempt property is not junior to unsecured creditors, because “unsecured creditors could never reach exempt property outside of bankruptcy,” and no other chapter in the Bankruptcy Code allows for the liquidation of exempt property.[116]

D. Issues After Confirmation

The BAPCPA delayed the time that an individual receives a discharge to when all payments under the plan have been completed.[117] Delaying discharge may cause some practical problems, however.[118] First, the court will have to rely on the debtor to notify the court that all payments under the plan have been made, since there is usually no trustee in a chapter 11 case.[119] Delaying discharge also raises the issue of when the case can be closed.[120] If the case must stay open until all payments have been made and discharged entered, the case may stay open indefinitely if the individual debtor does not notify the court, which a lay person may not know to do.[121] This then may require the court to monitor each individual debtor chapter 11 case to make sure that a notice that all payments have been made is filed with the court.[122]

Another hardship that may arise is in plan modification.[123] The BAPCPA amended chapter 13 to allow modification for the debtor to purchase health insurance,[124] while chapter 11 makes no such allowance for individual debtors.[125] Additionally, section 1127(e) allows the debtor, the trustee, or an unsecured creditor to modify anytime between confirmation and completion of payments under the plan.[126] However, secured creditors are not given standing to seek modification, although “they often bear the brunt of the long-term changes effected by chapter 11 plans.”[127]

IV. Why an Individual Debtor Should Avoid Filing Under Chapter 11

Chapter 11 filings for individual debtors are quite unattractive as compared to filing under chapter 13, and many individual debtors will choose to file under chapter 13.[128] There are many significant differences between chapter 11 and chapter 13:

  • Chapter 11 has a much more expensive filing fee.[129]
  • Chapter 11 does not have an automatic stay for co-debtors, as chapter 13 does.[130]
  • Chapter 11 does not contain a statutory authorization for separate classification of debts for which the debtor is co-liable, as chapter 13 does.[131]
  • Disposable income under chapter 11 need only be part of the “property to be distributed under the plan,”[132] which, unlike Chapter 13,[133] need not be distributed solely for the benefit of unsecured creditors, and therefore, can be distributed to administrative and secured creditors.[134]
  • The anticramdown provision of section 1325(a), which prohibits bifurcation of certain purchase money secured claims if the secured creditor is undersecured, does not apply in chapter 11.[135]
  • The plan length under chapter 13 cannot be more than five years, but chapter 11 imposes no such limit.[136]
  • Payments to a chapter 11 plan usually don’t start until after confirmation, which can be much later than the filing date;[137] chapter 13 debtors must begin payments under the plan within 30 days after the filing date, and before plan confirmation.[138]
  • As a prerequisite to discharge, a chapter 13 debtor must complete a financial management course, but there is no such requirement for chapter 11 debtors.[139]
  • Unlike chapter 13 debtors, a chapter 11 debtor must get court approval to retain counsel, who must be disinterested.[140]
  • Unlike chapter 13 debtors, chapter 11 debtors do not have the right to dismiss the case.[141]
  • Under chapter 11, administrative and involuntary gap claims must be paid in full, in cash, on the plan’s effective date;[142] chapter 13 allows for deferred cash payments on these claims.[143]
  • Plan confirmation is much harder under chapter 11, because impaired creditors have the right to either accept or reject the plan;[144] under chapter 13, a creditor’s acceptance of the plan is usually irrelevant.[145]

However, there are circumstances where a debtor may have to file under chapter 11, such as lack of a regular income, the amount of the debt, the desire to maintain control of one’s assets as a debtor-in-possession (“DIP”), or the need for a longer plan period.[146]

Section 109 limits debtors who can file under chapter 13 to those individuals “with regular income” who owe “on the date of the filing of the petition, noncontingent, liquidated, unsecured debts of less than $336,900 and noncontingent, liquidated, secured debts of less than $1,010,650.”[147] Therefore, an individual debtor who is engaged in business ventures, namely, real property, would not be eligible to file under chapter 13 if he exceeds this income threshold.[148] Many of these same individuals have high incomes, and therefore cannot file under chapter 7 because a presumption of abuse would arise under the means test.[149]

The consequence is that for certain individuals, the only option is to file under chapter 11.[150] This is especially significant in light of the downturn in the housing market.[151] Take for example a real estate investor who owns several properties.  Due to the economic downturn, he is losing money on several of his properties, and the debt from mortgages on those properties well exceeds the limit under section 109(e), so he is not eligible to file under chapter 13.[152] However, he is still making an income on some other properties, which raises a presumption of abuse under the means test, thus making him ineligible to file under chapter 7.[153] Yet, his debt could substantially outweigh the income he receives, and his only option is bankruptcy.  He would be forced into chapter 11, which is very difficult for the chapter 11 individual debtor.

Even if he decides not to file chapter 11, he can still be forced into it involuntarily by creditors,[154] which brings up issues of constitutionality.  “The policy against forcing an individual to work against his will is applicable, if the facts present themselves, in chapter 11 as well as in chapter 13.”[155] An individual chapter 11 debtor is in this position, given the effect of including post-petition earnings in property of the estate.[156] “Congress forcefully expressed its concern with the potential conflict with the Thirteenth Amendment’s prohibition against involuntary servitude by mandating that chapter 13 be strictly voluntary.”[157]

V. Conclusion

The BAPCPA inclusion of post-petition earnings has also created an issue of what that income can be spent on during the administration of the case.  Chapter 13 recognizes that an individual debtor must be able to subsist during this time, and specifically allows for expenses reasonably necessary for the maintenance or support of the debtor.  This provision should also be applied to chapter 11 debtors, since otherwise, an individual debtor’s use of their post-petition income, essentially their livelihood, may lead to the trustee recovering these amounts through his avoidance powers.

Additionally, a chapter 11 individual debtor cannot use their post-petition earnings in order to pay for an attorney hired to represent the debtor.  Rather, chapter 11 only allows for employment of attorneys if for the benefit of the bankruptcy estate, practically leaving an individual debtor without the means to retain legal representation.  This is not what the bankruptcy code was intended for, and therefore the chapter 13 provision allowing for compensation of an attorney to represent the debtor’s interest should also apply to chapter 11 individual debtors.

The ambiguity in determining whether the “best interest” test has been met in order to get plan confirmation is also a concern.  In determining what happens to the post-petition income, which is part of the chapter 11 estate but not the chapter 7, the bankruptcy code is silent for chapter 11 cases. However, chapter 13 allows a for a reversion of this income to the debtor, so a simple solution is to apply section 348(f) to individual debtor chapter 11 cases as well as to chapter 13 cases.

The biggest issue to address is the delayed discharge to when all payments under the plan have been completed. Since many individual debtors are not experienced with bankruptcy proceedings, a chapter 11 case may possibly stay open indefinitely if they do not know to notify the court of completion of their plan payments.  One of the goals of a bankruptcy case is to close the case earlier rather than later, but relying on a debtor to handle their bankruptcy estate is not going to accomplish this.  One way is to require the court to monitor the payments of an individual debtor, and make sure the debtor notifies the court when all payments are completed.  However, a better solution is to appoint a trustee to administer the estate.  The purpose of allowing debtors to administer their own estates in chapter 11 was so that a business, rather than a trustee, has control since a business owner is in a better position to know what is best for the business. This logic does not apply to an individual debtor, and so a trustee should be appointed in such case.

It is very difficult for an individual debtor to go through a chapter 11 bankruptcy. Although chapters 7 and 13 are much more appealing, many times the individual is ineligible and is forced into chapter 11, either voluntarily or involuntarily. The outcome is that these individuals are faced with a hardship, often as a result of circumstances, such as the decline in the housing market, which were beyond their control.  The purpose of bankruptcy is to give the poor and honest debtor a fresh start.  In this situation, the chapter 11 plan can be said to push an individual debtor into involuntary servitude.  Instead, chapter 11 for individual debtors should be structured more like chapter 13.  Most importantly, involuntarily chapter 11 filings for individual debtors should not be allowed, as is the case with chapter 13 filings. 

[1] The Bankruptcy Database at Harvard, (last visited Feb. 28, 2010). In 2007, there were a total of 6,242 chapter 11 petitions filed, of which 1,415 were of individuals; in 2009, the total filings rose dramatically to 15,140, of which 3,297 were of individual debtors. Id.

[2] Personal Bankruptcies Filings Rise Fast, The Wall Street Journal, Jan. 7, 2010,

[3] Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Pub. L. No. 109-8, 119 Stat. 23 (2005) (codified at 11 U.S.C. § 1115).

[4] Mark G. Douglas, The Year in Bankruptcy: 2009, published by the law firm Jones Day, Jan. – Feb. 2010, available at (compare with 138 filings in 2008).

[5] Compare the number of individual debtor chapter 11 filings, 3,297, to the number of public company filings, 210.  Supra notes 1, 4 and accompanying text.

[6] See Bruce A. Markell, The Sub Rosa Subchapter: Individual Debtors in Chapter 11 after BAPCPA, 2007 Univ. Ill. L.R. 67, 69-70 (2007) (describing the relationship between individuals and chapter 11 as “rocky” and, referring to the BAPCPA changes, stating that “it is about to get rockier.”); see Paul W. Bonapfel, Individual Chapter 11 Cases under BAPCPA, 25-6 Am. Bankr. Inst. J. 1, 1 (2006).

[7] Markell, supra note 6, at 70.

[8] 11 U.S.C. § 707(b)(2).

[9] See Markell, supra note 6, at 75.

[10] Id.

[11] Id. at 81.

[12] Bonapfel, supra note 6, at *55.

[13] BAPCPA, Pub. L. No. 109-8, § 321(a)(1), 119 Stat. 23, 94-95; 11 U.S.C. § 1115 (2009) (“In a case in which the debtor is an individual, property of the estate includes . . . earnings from services performed by the debtor after the commencement of the case. . . .”).

[14] 11 U.S.C. § 1123(a)(8) (stating that the chapter 11 plan must “provide for the payment to creditors . . . all or such portion of earnings from personal services performed by the debtor after the commencement of the case or other future income of the debtor as is necessary for execution of the plan); Markell, supra note 6, at 76.

[15] 11 U.S.C. § 362 (a).

[16] Markell, supra note 6, at 76 (citing Carver v. Carver, 954 F.2d 1573, 1577 (11th Cir. 1992).

[17] Markell, supra note 6, at 76.

[18] Id. Section 1115(b) states that, with certain exceptions, “the debtor shall remain in possession of all property of the estate.” 11 U.S.C. § 1115(b).  Compare with 11 U.S.C. § 521(a)(4) (requiring the debtor to surrender the property of the estate to the trustee).

[19] Markell, supra note 6, at 76-77; See BAPCPA § 321(b)(3), 119 Stat. at 95; 11 U.S.C. §1123(a)(8).

[20] 11 U.S.C § 1129(a)(15).

[21] 11 U.S.C § 1129(a)(15) (referring to § 1325(b)(2)).

[22] 11 U.S.C. § 1325(b)(2).

[23] 11 U.S.C. § 1325(b)(2); Markell, supra note 6, at 77-78.

[24] 11 U.S.C. § 1325(b)(2).

[25] 11 U.S.C. § 1322(d)(2)(C) (limiting the plan period to no more than 5 years).

[26] 11 U.S.C. § 1129(a)(15).

[27] BPACPA § 321(d), 119 Stat. at 95-96; Markell, supra note 6, at 78.

[28] 11 U.S.C. § 1141(d) (2000); amended by BAPCPA, Pub. L. No. 109-8, § 321(d), 119 Stat. 23, 95-96 (2005).

[29] In re Ball, No. 06-1002, 2008 WL 2223865 at *2 (N.D.W.V. 2008).

[30] Id. at *3.

[31] 11 U.S.C. § 1115.

[32] 11 U.S.C. § 1123(a)(8).

[33] BPACPA § 321(d)(2); 11 U.S.C. § 1141(d)(5)(A).

[34] In re Ball, 2008 WL 2223865 at *3.

[35] Markell, supra note 6, at 78.

[36] BAPCPA § 321(e), 119 Stat. At 96; 11 U.S.C. § 1127(3); Markell, supra note 6, at 79.

[37] In re Ball, 2008 WL 2223865 at *3.

[38] Markell, supra note 6, at 81.

[39] Id. at 82.

[40] Chapter 13 debtors must file their plan within fifteen days of commencing the case. Fed. R. Bankr. P. 3015(b).

[41] 11 U.S.C. § 1112(b)(4)(J); Markell, supra note 6, at 82.

[42] Markell, supra note 6, at 82.

[43] Id.; Cf 11 U.S.C. § 1325 (allowing expenses that are reasonably necessary for the “maintenance or support of the debtor or a dependent of the debtor.”).

[44] Markell, supra note 6, at 82.

[45] 11 U.S.C. § 503(b)(1)(A).

[46] Markell, supra note 6, at 82-83. For example, expenses such as a vacation, daily latte, or a gym membership.  See id.

[47] Markell, supra note 6, at 83 (2007).  Section 549 provides that the trustee “may avoid a transfer of property of the estate . . . that occurs after the commencement of the case” and that is not authorized under §549. 11 U.S.C.§ 549(a).

[48] 11 U.S.C. § 330(a)(4)(B) (emphasis added).

[49] Markell, supra note 6, at 83.

[50] 11 U.S.C. § 330(a)(1)(A).  Section 330 also allows for compensation to attorney employed under § 1103, which allows the employment of an attorney to represent a committee.  Id.; 11. U.S.C. § 1103(b).

[51] 11 U.S.C. § 327(a) (emphasis added).

[52] Markell, supra note 6, at 83.

[53] 11 U.S.C. § 1115.

[54] See Markell, supra note 6, at 83-84. 

[55] 383 B.R. 496 (C.D. Ca. 2007).

[56] Id. at 499.

[57] Id.

[58] Id. at 501.

[59] Id. at 502.

[60] Id. at 499-500.

[61] Markell, supra note 6, at 83-84; see 11 U.S.C. § 327(a) (the court may employ an attorney who does not “hold or represent an interest adverse to the estate”).

[62] BAPCPA, Pub. L. No. 109-8, § 442(s), 119 Stat. 23, 115-16 (2005); 11 U.S.C. § 1112(b)(4)(I); 11 U.S.C. § 1112(b)(4)(P).

[63] Markell, supra note 6, at 84 (citing 11 U.S.C. § 507(a); .11 U.S.C. § 1129(a)(9)(A); 11 U.S.C. § 1129(a)(14).

[64] 11 U.S.C. § 1129(a)(7).

[65] Markell, supra note 6, at 84.

[66] Id. at 85.

[67] 11 U.S.C. § 348(a) (“Conversion of a case under one chapter of this title to a case under another chapter of this title . . . does not effect[sic] a change in the date of the filing of the petition, the commencement of the case, or the order for relief.”).

[68] 11 U.S.C. § 541(a).  Property of the estate includes only “legal or equitable interests of the debtor in property as of the commencement of the case.” Id. (emphasis added).

[69] See Markell, supra note 6, at 85.

[70] See id.

[71] 11 U.S.C. § 349(f); see Markell, supra note 6, at 85.

[72] 11 U.S.C. § 1129(a)(7); see 11 U.S.C. § 349(f); Markell, supra note 6, at 85.

[73] 11 U.S.C. § 1129(a)(3).

[74] Markell, supra note 6, at 86.

[75] In re Weber, 209 B.R. 793, 797 (D. Mass. 1997).

[76] In re Harman, 141 B.R. 878, 889 (E.D. Pa. 1992).

[77] See Markell, supra note 6, at 86.

[78] 11 U.S.C. § 1123(a)(8).

[79] See Markell, supra note 6, at 86.

[80] 11 U.S.C. § 1129(a)(11).

[81] 11 U.S.C. § 1141(d)(5).

[82] Fed R. Bankr. P. 4007(c).

[83] See Markell, supra note 6, at 86.

[84] See id.

[85] 11 U.S.C. § 1129(a)(15).

[86] Markell, supra note 6, at 87.  For example, if the debtor owns property that is worth more than his projected disposable income, can the debtor offer the property in lieu of his actual earnings over the five year period? Id.

[87] 11 U.S.C. § 1129(a).

[88] 11 U.S.C. §1129(a)(8).

[89] 11 U.S.C. § 1129(b)(1).

[90] Markell, supra note 6, at 87.

[91]See, e.g., In re Idearc Inc., 2009 Bankr. LEXIS 4202 (N.D. Tex. 2009); In re Woodscape Ltd. Partnership, 134 B.R. 165, 171 (D. Md. 1991).

[92] In re Idearc Inc., 2009 Bankr. LEXIS at *73-74.

[93] Markell, supra note 6, at 89.

[94] Id. Although elimination of the equity class in an individual case is something courts avoid, it is not without precedent. Id. “[Under Roman law], creditors might cut the debtor’s body into pieces, and each of them take his proportionable share.”  Id. at n. 170 (citing William Blackstone, 2 Commentaries *472).

[95] See 11 U.S.C. § 1129(a)(8); 11 U.S.C. § 1129(b)(1), (2); Markell, supra note 6, at 89.

[97] 282 B.R. 45 (S.D. Fla. 2002).

[98] Id. at 48-52.

[99] Id. at 52.

[100] Id. at 52-53. [282 B.R. 45, 52-53]

[101] 11 U.S.C. § 1129(b)(2)(B)(ii).  This is subject to the requirements of § 1129(a)(14), which refers to the debtor’s domestic support obligations.  Id.; 11 U.S.C. § 1129(a)(14).

[102] 11 U.S.C. § 1115(a).

[103] Markell, supra note 6, at 90.

[104] 11 U.S.C. § 1129(a)(15); Markell, supra note 6, at 90.

[105] Markell, supra note 6, at 90.

[106] 11 U.S.C. § 1123(a)(8); Markell, supra note 6, at 90.

[107] William L. Norton, Jr., Norton Bankruptcy Law and Practice § 84A: 1 (2d ed. 2006).

[108] Id.

[109] 369 B.R. 477 (D. Neb. 2007).

[110] Id. at 480.

[111] Id. at 480.

[112] 358 B.R. 541 (D. Conn. 2007)

[113] Id. at 543.

[114] Id. at 544.

[115] Id. at 544.

[116] Id. at 545.  Section 522 states that “property exempted under this section is not liable during or after the case for any debt of the debtor that arose . . . before the commencement of the case.  11 U.S.C. § 522(c).  Section 522(d) lists property that may be exempted. 11 U.S.C. § 522(d).

[117] 11 U.S.C. § 1141(d)(5).

[118] In re Sheridan & Sheridan, 391 B.R. 287, 291 (E.D.N.C. 2008).

[119] Id.

[120] Id.

[121] Id.

[122] Id.

[123] Markell, supra note 6, at 90.

[124] 11 U.S.C. § 1329(a)(4).

[125] Markell, supra note 6, at 91.

[126] 11 U.S.C. § 1127(e); 11 U.S.C. § 1329(a).

[127] Markell, supra note 6, at 91.

[128] Bonapfel, supra note 6, at *53.

[129] Administrative Office of the U.S. Courts, Bankruptcy Filing Fees – Effective April 9, 2006, (last visited Mar. 1, 2010).  The filing fee for chapter 11 is $1,039 as compared to $274 for chapter 13. Id.

[130] 11 U.S.C. §§ 1101-1174; Cf. 11 U.S.C. § 1301 (imposing the automatic stay against a co-debtor).

[131] 11 U.S.C. §§ 1101-1174; Cf. 11 U.S.C. § 1322(b)(1) (allowing the classification only for consumer debts).

[132] 11 U.S.C. § 1123(a)(8).

[133] Cf. 11 U.S.C. § 1325(b)(1)(B) (requiring that the plan “provides that all of the debtor’s projected disposable income . . . will be applied to make payments to unsecured creditors under the plan.”)

[134] Markell, supra note 6, at 80.

[135] 11 U.S.C. § 1325(a); Markell, supra note 6, at 80.

[136] See supra footnotes 20-26 and accompanying text.

[137] Markell, supra note 6, at 80-81.

[138] 11 U.S.C. § 1326(a)(1).

[139] 11 U.S.C. § 1328(g)(1); Markell, supra note 6, at 81.

[140] Bonapfel, supra note 6, at *54.  Under chapter 11, the debtor is a DIP, with the responsibilities of a trustee. 11 U.S.C. § 1107(a).  The trustee, and thus the DIP, may retain counsel, but with the court’s approval. 11 U.S.C. § 327(a).  The retained counsel must not “hold or represent an interest adverse to the estate,” and must be a “disinterested” person. 11. U.S.C. § 327(a).

[141] Compare 11 U.S.C. § 1112(b) with 11 U.S.C. § 1307(b).

[142] 11 U.S.C. § 1129(a)(9)(A).

[143] 11 U.S.C. § 1322 (a)(2).

[144] 11 U.S.C. § 1126(a).  Class acceptance of a chapter 11 plan requires “at least two-thirds in amount and more than one-half in number” of the claims held by creditors in the class who vote. 11 U.S.C. § 1126(c).

[145] Bonapfel, supra note 6, at *54.

[146] Bonapfel, supra note 6, at *53.

[147] 11 U.S.C. § 109(e).

[148] See Donald R. Lassman, Individual Chapter 11s Really Do Work: Practical Considerations for Small-Business Debtors, 27-2 Am. Bankr. Inst. J. 18, 18 (March 2008).

[149] See id.

[150] See Jerald I. Ancel, et al., Advising an Individual Chapter 11 Debtor on the Impact of 11 U.S.C. § 1129(A)(15), 27-MAY Am. Bankr. Inst. J. 20, 20 (May 2008).

[151] See id.

[152] 11 U.S.C. § 109(e).

[153] 11 U.S.C. § 707(b)(2).

[154] 11 U.S.C. § 303(a).

[155] In re Noonan, 17 B.R. 793, 794 (S.D.N.Y. 1982).

[156] 11 U.S.C. § 1115.

[157] See Ancel, supra note 155 at 20 (May 2008) (citing In re Aberegg, No. 90-30156 HCD, 1990 WL 92427,at *5 (N.D. Ind. June 15, 1990)).