BANKRUPTCY ALTERNATIVES

Debtors should be aware that there are several alternatives to chapter 7 relief

For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Such debtors should consider filing a petition under chapter 11 of the Bankruptcy Code. Under chapter 11, the debtor may seek an adjustment of debts, either by reducing the debt or by extending the time for repayment, or may seek a more comprehensive reorganization. Sole proprietorships may also be eligible for relief under chapter 13 of the Bankruptcy Code.

In addition, individual debtors who have regular income may seek an adjustment of debts under chapter 13 of the Bankruptcy Code. Indeed, the court may dismiss a chapter 7 case filed by an individual whose debts are primarily consumer rather than business debts if the court finds that the granting of relief would be substantial abuse of the provisions of 11 chapter 7. 11 U.S.C. §707(b).

A number of courts have concluded that a chapter 7 case may be dismissed for substantial abuse when the debtor has the ability to propose and carry out a workable and meaningful chapter 13 plan. The Bankruptcy Judges Division has prepared a separate pamphlet which discusses chapter 13 of the Bankruptcy Code in greater detail.

Debtors should also be aware that out-of-court agreements with creditors or debt counseling services may provide an alternative to a bankruptcy filing.

Are you in need of an expert Texas Bankruptcy attorney that is focused in protecting your rights?... If so, contact our Texas Bankruptcy attorney now and receive a free Bankruptcy case evaluation for Texas and national Laws.

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