What debts are eligible to be discharged in Chapter 11?

In North Carolina, filing for Chapter 11 bankruptcy can provide relief from debts for individuals, self-employed people, and businesses. Chapter 11 bankruptcy allows for a reorganization of debts, meaning that certain debts can be discharged or paid off over time. Eligible debts are typically categorized by secured debts and unsecured debts. Secured debts are those debts that are backed by collateral, such as a car loan or a mortgage. Under Chapter 11 bankruptcy, these secured debts can be discharged if the debtor either pays off the debt in full or agrees to a new repayment plan. Unsecured debts are those that are not backed by collateral, such as credit card debt. These debts can be discharged under Chapter 11 bankruptcy, as long as they meet certain criteria. Generally speaking, unsecured debts must be “unreasonable and oppressive” in order to be eligible for discharge. The court will also consider the amount of money owed, the debtor’s ability to pay, and the nature of the debts in order to determine if they are eligible for discharge. In addition, Chapter 11 bankruptcy can also discharge certain priority debts, such as income taxes. These debts are typically given priority in the repayment process and cannot be discharged in Chapter 7 bankruptcy, but they may be eligible under Chapter 11. Overall, filing for Chapter 11 bankruptcy in North Carolina can provide relief from both secured and unsecured debts, as well as certain priority debts. The court will consider the amount of money owed, the debtor’s ability to pay, and the nature of the debts when determining eligibility for discharge.

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