How does the court decide which debts to discharge in a Chapter 11 bankruptcy?

The court considers a variety of factors when determining which debts will be discharged in a Chapter 11 bankruptcy in California. First, the court reviews all claims against the debtor and determines their validity. This includes examining whether the debt is secured by any form of collateral, such as a mortgage or lien. The court also looks at how much of the debt is secured compared to unsecured, and determines if the debtor’s assets are sufficient to fully or partially pay the debt. The court also considers the nature of the debt and whether the debtor is able to continue making payments on the debt. If the debtor has a long history of making payments on time and has a good track record of meeting their financial obligations, then the court may be inclined to allow the debtor to continue making payments and discharge the debt. However, if the debt is a priority debt, such as taxes owed or back child support, then it is less likely that the court will discharge it. Finally, the court will consider any objections that creditors may have against the debtor. If creditors object to the debtor’s repayment plan or have evidence of fraudulent activities, the court may decide to not discharge the debt. The court will also review any special considerations, such as if the debtor is disabled or elderly, when deciding which debts to discharge.

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How does the court decide which debts to discharge in a Chapter 11 bankruptcy?

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