Options For Debt Elimination Under Federal Law

In all cases initiated under Title 11 (the "Code"), debtors in bankruptcy have a wide assortment of tools and alternatives for the elimination of debts, or alternatively, the partial payment of debts upon restructured terms. A few of these tools include:

• Discharging debts through Chapter 7 without further payment of any kind
• Reorganizing debts through Chapter 13 for lower payments, lower interest, extended payout periods, and reduction of late fees.
• Partial discharge of debts after payment through a reorganization plan
• Redemption of Property from collection proceedings
• Reaffirmation of debts to prevent discharge and loss of collateral

For even more extensive options, rights, entitlements and duties, a debtor-in-possession under Chapter 11 may repudiate commitments, void contracts, and discharge debts while remaining in business.