11 U.S.C. Section 109 -- Who May Be a Debtor

What Is Section 109?

Section 109 of Title 11 of the United States Code (Who May Be a Debtor) is a foundational provision of the Bankruptcy Code. It sets the threshold eligibility requirements for filing bankruptcy. Not everyone can file every chapter. Section 109 determines which entities and individuals qualify for Chapter 7, 11, 12, and 13 based on residency, debt limits, credit counseling, and other criteria.

Key Provisions of Section 109

Key eligibility requirements under Section 109:

• 109(a) -- General Residency: Only a person that resides in the United States, has a domicile here, has property here, or has a place of business here may be a debtor. This covers U.S. citizens, residents, and foreign entities with U.S. assets.
• 109(b) -- Chapter 7 Eligibility: Any person (individual, corporation, partnership) may be a Chapter 7 debtor, except railroads, insurance companies, banks, savings institutions, and certain other financial institutions regulated under other federal law.
• 109(d) -- Chapter 11 Eligibility: Any person who may be a debtor under Chapter 7 may file Chapter 11. Railroads can also file Chapter 11. Stockbrokers and commodity brokers may not.
• 109(e) -- Chapter 13 Debt Limits: Only individuals with regular income may file Chapter 13, and only if noncontingent, liquidated debts do not exceed the debt limit. As of 2024, the limit is $2,750,000 (combined secured and unsecured). This limit was raised and unified by the Bankruptcy Threshold Adjustment and Technical Corrections Act.
• 109(g) -- Filing Bar: A debtor may not file if they had a case dismissed within the past 180 days for willful failure to abide by court orders or for filing a voluntary dismissal after a creditor sought relief from the automatic stay.
• 109(h) -- Credit Counseling: An individual debtor must complete credit counseling from an approved provider within 180 days before filing. Failure to do so makes the petition deficient.

How This Affects You

How Section 109 affects your filing decision:

• Chapter 13 debt limits: If your total debts exceed the Chapter 13 limit ($2,750,000 combined), you cannot file Chapter 13 and must use Chapter 7 or Chapter 11. This affects some homeowners with large mortgages.
• Credit counseling timing: You must complete the credit counseling course before you file your petition. A petition filed without the certificate is defective and may be dismissed. Budget $15-$50 and 60-90 minutes for the course.
• The 180-day bar (109(g)): If your prior case was dismissed for failure to comply with court orders or voluntary dismissal after a stay relief motion, you cannot refile for 180 days. This prevents abusive serial filing.
• Business entities: LLCs, corporations, and partnerships can file Chapter 7 or Chapter 11 but not Chapter 13. Only individuals (or individuals with sole proprietorships) qualify for Chapter 13.

Related Bankruptcy Code Sections

Section 109 works in conjunction with several other provisions of the Bankruptcy Code:

• Section 707 -- Dismissal after eligibility is established
• Section 521 -- Debtor duties after filing
• Credit Counseling -- Completing the 109(h) requirement
• Discharge Screener -- Check eligibility for repeat filing

Understanding how these sections interact is critical for anyone navigating the bankruptcy process, whether as a debtor, creditor, or attorney.