Probated Matters

There are a variety of reasons why a debtor might prefer a workout to bankruptcy. By entering into a voluntary agreement with creditors, the debtor avoids the public stigma that attaches to bankruptcy  but achieves the same results-discharge from all or a portion of his or her debts. In fact, a workout can be even broader than a bankruptcy. Also, a workout does not affect the debtor's rights to file a future bankruptcy. However, certain types of bankruptcy discharges do. But the main advantage of a workout is that it is voluntarily entered into by both the debtor and the participating creditor(s). In a workout, unlike bankruptcy, the majority of creditors cannot cram down concessions on dissenting creditors. All of the participating creditors must agree to the workout's terms.