Chapter 11 Bankruptcy in Florida
Chapter 11 lets Florida businesses and high-debt individuals reorganize instead of liquidating. Orlando attorney, Middle District practice. Most small businesses qualify for faster Subchapter V.
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By Juan C. Burgos, Esq. | Business Bankruptcy Attorney | More Than a Decade of Experience | Florida Bar Active Status | Updated: 2026
Chapter 11 is the reorganization chapter of the U.S. Bankruptcy Code. Instead of shutting down and liquidating, a business (or an individual with debts too large for Chapter 13) proposes a court-approved plan to restructure what it owes — and keeps operating while it does.
When an airline or retail chain "files Chapter 11" and keeps flying or selling, this is the law they're using. It's not just a tool for big corporations, either — businesses of every size in Central Florida use it, and so do some individuals.
This shows up constantly in specific local industries, too — Central Florida auto dealerships and restaurants use Chapter 11 and Subchapter V regularly, usually because of a personal guarantee tied to floor-plan financing or a commercial lease.
Before you read further: most small businesses belong in Subchapter V
If your business owes $3,424,000 or less (2026 limit), Congress built a faster, dramatically cheaper version of Chapter 11 for you — Subchapter V. No creditors' committee, no quarterly U.S. Trustee fees, a 90-day plan, and you keep ownership.
Read the Subchapter V guide — that page, not this one, is where most Orlando small business owners should start.
Own an auto dealership or a restaurant specifically? Debt in those industries almost always comes with a personal guarantee attached — our small business bankruptcy guide walks through what that means for your situation.
This page covers traditional Chapter 11: larger debts, complex structures, and individual filings.
Subchapter V vs. Traditional Chapter 11: Side by Side
| Subchapter V | Traditional Chapter 11 | |
|---|---|---|
| Eligible debt | $3,424,000 or less (2026 limit) | No debt limit |
| Creditors’ committee | Not appointed in most cases | Standard — adds cost and time |
| Quarterly U.S. Trustee fees | None | Required, can be substantial |
| Plan filing deadline | 90 days after filing (extensions possible) | No statutory deadline — often a year or more |
| Keep ownership without paying creditors in full | Yes — the absolute priority rule doesn’t apply | Only with creditor consent, or by satisfying the absolute priority rule |
| Typical cost | A fraction of traditional Chapter 11 | Professional fees commonly reach six figures |
| Typical timeline | Months | A year or more |
Key Chapter 11 Terms, Explained
Automatic stay: the moment a case is filed, a court injunction immediately stops lawsuits, foreclosures, repossessions, and most collection calls against you or your business.
Creditors’ committee: a group of unsecured creditors, usually the largest, appointed to negotiate on behalf of that class in a traditional Chapter 11 case. Subchapter V typically skips this step entirely — a large part of why it’s faster and cheaper.
Executory contract / lease rejection: a Chapter 11 debtor can cancel (“reject”) contracts and leases that are still partly unperformed on both sides — a lease on a location you’re closing, for example — without paying out the full remaining term.
§363 asset sale: a sale of business assets approved by the bankruptcy court, “free and clear” of most existing liens and claims — often faster than a sale outside bankruptcy because it removes a buyer’s biggest risk: inherited liability.
Who uses traditional Chapter 11
🏢Businesses over the Subchapter V debt limit or with complex creditor structures.
👤Individuals whose debts exceed the Chapter 13 caps — common with multiple investment properties or large personal guarantees. Can you file Chapter 11 as an individual? Learn more →
🛠Companies needing Chapter 11-specific tools: rejecting burdensome leases and contracts, selling assets free and clear (§363), restructuring secured debt over objection.
How a Chapter 11 case works
1. Petition filed: for Central Florida — Orange, Osceola, and Seminole counties — in the U.S. Bankruptcy Court, Middle District of Florida, Orlando Division. The automatic stay stops lawsuits, foreclosures, and collections that day.
2. Debtor in possession: you keep running the business. No trustee takes over unless there's a specific reason for the court to step in.
3. Plan and disclosure statement: how much creditors receive, over what period, and from what income or asset sales.
4. Creditor voting and confirmation: classes of creditors vote, and the court can confirm the plan over dissent if the legal standards for a "cramdown" are met.
5. Performance and discharge: complete the plan, and the restructured debts are resolved.
Chapter 11 vs. Chapter 7 for a business
The honest question: is the business worth more alive than dead? If operations are viable once debt is restructured, Chapter 11 (or Subchapter V) preserves the going-concern value, the jobs, and your equity.
If not, Chapter 7 winds it down in an orderly, final way. We'll tell you which one applies once we've looked at your real numbers — including the honest answer being "neither, yet."
Individual Chapter 11 vs. Chapter 13
Individuals aren't limited to Chapter 7 and Chapter 13. If your debts are too large for Chapter 13 — common with multiple investment properties, a large personal guarantee, or a complex asset mix — individual Chapter 11 is the route that's actually built for your situation.
| Chapter 13 | Individual Chapter 11 | |
|---|---|---|
| Debt limits | $1,580,125 secured / $526,700 unsecured | No debt limit |
| Typical filer | Wage earner with a steady paycheck | Multiple properties, large personal guarantees, or complex assets |
| Repayment plan | Fixed 3–5 year plan | More flexible plan terms, court-negotiated |
| Best fit | Debts within Chapter 13’s caps | Debts above Chapter 13’s caps, or assets too complex for a standard plan |
FAQs
How much does Chapter 11 cost?+
Traditional Chapter 11 is the most expensive chapter — professional fees commonly reach six figures for complex cases. This is exactly why we screen every small business for Subchapter V first.
Does the business owner lose control in Chapter 11?+
Normally, no — you operate as debtor in possession throughout the case.
Can an individual file Chapter 11?+
Yes, and it's the standard route once debts exceed Chapter 13's limits. Read our individual Chapter 11 guide.
How long does Chapter 11 take?+
Traditional cases often run a year or more; Subchapter V cases are built to move in months, not years.
Where are Orlando-area cases filed?+
U.S. Bankruptcy Court, Middle District of Florida, Orlando Division — the only district we practice in.
What happens to my employees if I file Chapter 11?+
They keep their jobs — that's the point of reorganizing instead of shutting down. Payroll continues in the ordinary course of business. If any wages were unpaid right before filing, federal law gives those claims priority treatment up to $17,150 per employee (11 U.S.C. § 507(a)(4)).
Do I keep ownership of my business in Chapter 11?+
Under Subchapter V, yes — you can keep 100% of your equity even if creditors aren't paid in full, because the absolute priority rule doesn't apply. In traditional Chapter 11, keeping full ownership usually means either paying creditors in full or getting their consent to a plan that lets you keep it anyway.
Will Chapter 11 affect my personal credit score?+
If your business is a corporation or LLC, a business Chapter 11 filing generally doesn't appear on your personal credit report — unless you personally guaranteed some of the debt, which is common for small businesses. If you file Chapter 11 as an individual, it can stay on your personal credit report for up to 10 years, the same reporting window as Chapter 7.
What to Expect at Your Free Consultation
We'll go through your actual numbers — debts, assets, and any personal guarantees — and tell you plainly whether Subchapter V, traditional Chapter 11, or something else entirely fits your situation. No pressure, no obligation to file.
What to bring:
- Recent tax returns (business and personal, if applicable)
- A list of debts, including any personal guarantees
- A list of major business or personal assets
- Any lawsuit papers, judgments, or collection notices you've already received
- For a business filing: articles of incorporation or organization, and your operating or partnership agreement
Talk to an Orlando Chapter 11 attorney
Free consultation, straight answers, and an honest screen for whether Subchapter V saves you six figures.
🌐 Asistencia en Español: Se habla español · Falamos português. Visit: Bancarrota Capítulo 11 en Orlando.
By Juan C. Burgos, Esq. — Florida Bar No. 84056. This firm is a federally designated debt relief agency, assisting businesses and consumers seeking protection and reorganization under the United States Bankruptcy Code. Accessing or reviewing the materials on this website does not create an attorney-client relationship.