Many people find that they are unable or unwilling to file bankruptcy because a bankruptcy filing may be too detrimental to their business reputation, future job prospects or credit opportunities.  For many debtors, credit problems are merely a matter of timing – you have the ability to pay but require more relaxed payment terms.  Fortunately, there are many attractive alternatives to bankruptcy that may present a better solution to solve your credit problems.

 

Creditor Negotiations – Direct settlement discussions with credit card companies to achieve a favorable settlement, typically through a one-time lump sum payment of a percentage of the unpaid balance.

 

Creditor Composition – Direct settlement discussions with a group of creditors about a plan of repayment over time with all similarly situated creditors treated on the same terms and conditions.

 

Business wind down –Cessation of business operations over time through procedures such as “Going out of Business Sales” or other recognized methods, with payments to creditors in an orderly manner and in accordance with the priority scheme under applicable state and federal laws, followed by formal dissolution of the corporate entity.

 

Assignment for the Benefit of Creditors – A procedure under state law for winding down the operations of companies that are no longer able to operate due to business conditions and/or creditor pressures.  Essentially an out-of-court liquidation managed by a liquidation professional whose role is to promptly and orderly liquidate the company’s assets and distribute the proceeds from the liquidation to creditors in accordance with applicable priority laws.  Must obtain assent of more than 50% in number  and amount of creditor claims.

 

Receivership Proceedings – A creditor remedy supervised by a State Court Judge whereby a Receiver is appointed to take over the operations of a company that is unable to pay its bills and whose purpose is to liquidate the company or otherwise ensure payment of the claim of the creditors that initiated the receivership proceeding.