Understanding Alex Jones’ Bankruptcy Conversion Strategy

Conspiracy theorist Alex Jones filed for Chapter 11 bankruptcy after losing a lawsuit filed by the relatives of the victims of the Sandy Hook Elementary School shooting. That judgment was for $1.5 billion. However, he’s converting his Chapter 11 to Chapter 7 bankruptcy. Here’s what you need to know about converting from one chapter to another.

This post was updated on March 6, 2025.

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Chapter 11 Bankruptcy versus Chapter 13 Bankruptcy

With Chapter 11 bankruptcy, which I like to describe as similar to Chapter 13 bankruptcy, the difference is when it comes to consumers; it is for high-wealth individuals. With Chapter 13 bankruptcy, the debt limit is $2,750,000. If the secured and unsecured debt exceeds $2,750,000, a Chapter 11 bankruptcy is filed.

Chapter 13 bankruptcy is filed when a debtor’s income exceeds the amount allowed by the means test, so the debtor doesn’t qualify for Chapter 7 bankruptcy. Chapter 13 is also used to keep nonexempt assets.

Also, Chapter 13 bankruptcy cannot be filed for a business, only consumers.

The Sandy Hook Elementary School Shooting Lawsuit Against Alex Jones

Since the Sandy Hook Elementary School Shooting, Jones has been falsely claiming through his radio/TV show, The Alex Jones Show, and his website, Infowars, that the shooting was a hoax. That the victims were “crisis actors.” Jones did testify that the Sandy Hook School Shooting was real.

The twist to this story is that now Jones has filed a motion to convert his case from Chapter 11 to Chapter 7 bankruptcy. A few days ago, I discussed the issue of converting from one Chapter in bankruptcy to another based on a question from a Reader. You can read “Car Repo? Chapter 7 vs. Chapter 13” via this link.

Here’s where it gets interesting. Not all debts can be discharged in bankruptcy. This includes willful and malicious acts. So, since bankruptcy won’t wipe out the judgment from the Sandy Hook victims, Jones is converting to Chapter 7 bankruptcy. There’s the twist!

Filing Chapter 7 Bankruptcy in Texas

Texas has generous bankruptcy exemptions. For example, homestead property up to ten acres within a city is protected, and up to 100 acres in a rural area. One car is fully protected under the motor vehicle exemption and up to $50,000 in personal property. Compare this to Florida, my home state, which is considered favorable to debtors.

The motor vehicle exemption in Florida was recently raised from $1,000 to $5,000. While the homestead exemption in Florida is unlimited, it only protects up to one-half acre. The personal property exemption is only $1,000 if the debtor owns a home and $4,000 if they don’t.

Alex Jones Converting from Chapter 11 to Chapter 7 Bankruptcy

Chapter 7 bankruptcy is known as a liquidation. This means nonexempt assets are liquidated by having the bankruptcy trustee auction off those assets. Any funds received are used to pay creditors.

But the victims of Sandy Hook who filed the lawsuit, while creditors, can’t be wiped out with bankruptcy. So what happens next for Jones?

Chapter 7 Liquidation

It has been reported that Jones’s Texas ranch has a value of $2.8 million. Let’s assume that it is fully exempt, as well as a vehicle, and assume $50,000 in cash and personal property. Jones is reportedly worth $9 million, including his stake in Infowars and the Alex Jones TV and radio show.

Through Chapter 7 liquidation, Jones would lose any nonexempt assets, including his interest in the show and website. Jones has stated that the dietary supplements he sells on his show aren’t worth anything if he can’t sell them. Undoubtedly, it’s a tactic to keep his show and an attempt to have the bankruptcy trustee lose interest.

What’s Next for Alex Jones?

If Jones’s assets are going to be liquidated, and the Sandy Hook judgment can’t be wiped out in bankruptcy, how does bankruptcy help Jones? I would say his strategy is to become judgment-proof.

What is Judgment Proof?

Being judgment-proof means that a creditor cannot collect upon the judgment. It doesn’t mean that the judgment is invalid; it just means that the creditor has no way of getting paid at the moment.

For example, I have often advised clients with no assets and whose only form of income is Social Security that they are judgment-proof. So, while a creditor can sue them and get a judgment in their favor, they can’t collect unless something changes financially with the client.

For example, if you are judgment-proof but win the lotto, those gambling winnings wouldn’t be protected, and now the creditor can seek to enforce the judgment. This would even include interest that has been accruing since the judgment.

Since Texas has generous bankruptcy exemptions, Jones’s homestead would be protected. However, the nonexempt assets are liquidated, and the funds are used to pay the victims of the Sandy Hook lawsuit.

However, the victims will only receive a fraction of what is owed on the judgment. So, there is a remaining balance. Creditors have multiple ways of collecting on a judgment. In some states, a lien could even be put on homestead property. However, the creditor can only collect on that lien once that property is sold.

Understanding the Automatic Stay in Bankruptcy

For example, suppose a creditor placed a lien on homestead property. When that house is sold, that lien is paid off after the mortgage. If the homeowner passes away, the creditors can also seek to collect while the house and other assets are in probate court.

However, creditors can also seek to garnish wages. While the wage garnishment for each state varies between 15% to 25%, can the Sandy Hook victims seek to garnish Jones’s wages? The answer is yes!

But that’s part of what I believe to be Jones’s strategy. If Jones gives up his stake in his website, Infowars, and the TV and radio show, he could still be part of both as an employee. But I would guess that to avoid the wage garnishment, he would be hired as a 1099 employee. A 1099 employee cannot have their wages garnished.

Of course, the issue is how his salary is used. For example, he just can’t get paid and deposit the money in a bank account and expect that to be protected. But he can use his income to pay down the mortgage on his homestead property. However, as stated, the creditors can place liens on his assets.

What happens next, time will tell. I’ll post any updates on Jones’ case as I consider the issues and strategies being used to be interesting and something we can all learn from.

Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. For paralegals and students buying single copies, you can do so via Amazon books. To access my YouTube channel, click this link.

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Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.