Individual Debtors

Individuals are eligible for relief under Chapters 7, 11 and 13 of the Bankruptcy Code. Chapter 7 involves a liquidation of an individual's nonexempt assets under the direction of the trustee. Chapters 11 and 13 permit a debtor to retain nonexempt assets and pay creditors from future income through a plan approved by the court. Individuals whose debts are primarily related to business may use any one of these chapters to achieve appropriate financial restructuring goals.

In the business context, individuals are most likely to need the protection of Chapter 7 where they have guaranteed the debt of a business which has ceased operations, without being able to pay all of its obligations. In such a situation, the lender to the business usually seeks to satisfy any deficiency from the assets or income of the guarantor. The individual guarantor can obtain a fresh start, free of liability to creditors of the business, through Chapter 7.

A Chapter 7 bankruptcy case may also be necessary where an individual filed tax returns, but failed to pay the taxes when the return was filed. If the individual is unable to satisfy his or her tax liability when the federal or state taxing authorities seek payment, certain older taxes may be discharged in a bankruptcy case.

Chapter 11 is useful to individuals who are operating a business in their own name or who own parcels of investment property in their own name. In such a situation, an individual Chapter 11 case progresses in a manner similar to a corporate Chapter 11 case. Where an individual has guaranteed corporate debt, the individual may also need to file a Chapter 11 case as a companion to the corporate Chapter 11 case.

Chapter 13 cases of individual sole proprietors are infrequent, but provide a speedier and less expensive alternative to Chapter 11 cases for those individuals.

James Olson has represented numerous individuals who have suffered financial reverses in their business and needed the fresh start of an individual bankruptcy case in order to rebuild their lives. These entrepreneurs have built businesses in a variety of industries, including retail furniture, real estate development, advertising and brand promotion, medicine, residential construction and rehabilitation, and many others. Depending on the circumstances and the business goals, Mr. Olson has commenced individual business bankruptcy cases under each of Chapters 7, 11 and 13.

Although Mr. Olson's bankruptcy practice is primarily in the area of business bankruptcies, Mr. Olson regularly represents appropriate consumer bankruptcy clients in Chapter 7 cases pro bono. For more information, see the Pro Bono page on this website.

On occasion, Mr. Olson represents individual consumer debtors whose situations involve special circumstances which would require his background and experience as a business lawyer, such as, for example, a pending divorce action.

Website of James C. Olson, Attorney and Counselor at Law, 10451 Mill Run Circle, Suite 400, Owings Mills, MD 21117, (410) 356-8852,, © 2012 all rights reserved.

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