Several weeks ago, we wrote about how Gawker Media Group is filing for Chapter 11 bankruptcy to save the company. Broadcast network Univision has bought Gawker for $135 million. However, this case has taken an interesting turn for other reasons. Recent circumstances have caused Gawker’s founder, Nick Denton, to file for Chapter 11 bankruptcy to protect his assets.
Hulk Hogan, whose real name is Terry Bollea, will be temporarily barred from collecting his judgment against Denton. Bollea secured a judgment of $10 million against Denton. Denton is also jointly liable for another $115 million judgment. Remember, filing for bankruptcy issues an automatic stay, which temporarily halts collection activities.
So how did Denton file for Chapter 11 bankruptcy as an individual? After all, we are used to hearing about companies, not people, filing for Chapter 11. Individuals file for Chapter 11 bankruptcy all the time, but their finances are often very different than your average debtor.
Why Would an Individual File for Chapter 11 Bankruptcy?
A person may have too many debts to file for Chapter 13 bankruptcy. People in this situation tend to be wealthier and have complex finances that require them to file for Chapter 11. For example, Denton listed assets of $10 to $50 million and liabilities of $100 to $500 million. Denton far exceeds the Chapter 13 or Chapter 7 bankruptcy limits. When the public hears about an individual filing for Chapter 11, it is almost always someone rich or famous. The reason why is because they likely have no other choice.
Another good reason for individuals to file for Chapter 11 bankruptcy is the lengthy repayment period. Chapter 13 bankruptcy allows individuals 60 months to 5 years to pay back their debts. On the other hand, Chapter 11 bankruptcy allows individuals 10 years to pay back debts, meaning they have smaller payments for a longer period of time.
If you are facing financial difficulties and are looking to resolve your debts, the Kansas City bankruptcy attorneys at The Sader Law Firm can help you find solutions.