General Motors directors are reportedly considering a Chapter 11 bankruptcy filing and seeking court protection in an attempt to cope with the ailing carmaker’s dwindling cash reserves. According to people familiar with situation, the plans go directly against CEO Rick Wagoner’s claims that bankruptcy is not an option as it would turn away more customers from buying GM products.

The information was first reported in the Wall Street Journal, which also claimed that GM has provided a statement saying the board had discussed bankruptcy but didn't view it as a "viable solution to the company's liquidity problems.''

GM spokesman Tony Cervone also told the paper that management is considering everything possible to avoid a filing, including Chapter 11 as this is a legal duty. Earlier this month the carmaker warned that it may be unable to service its debts within the next couple of months, possibly by the end of the year unless it gets taxpayer-funded rescue package.

Wagoner, Ford boss Alan Mulally and Chrysler CEO Robert Nardelli appeared before Congress this week seeking $25 billion in low-interest loans, but were refused by members of the House and Senate committees because their proposals were deemed unviable. However, the carmakers will get another chance to plead their case in front of the committees in the first week of December.