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

In Michigan, a bankruptcy court will decide which debts to discharge in a Chapter 11 bankruptcy based on the debtor’s ability to repay the debt. This means that the court looks at the debtor’s income, assets, and other circumstances in order to determine which debt should be discharged and which should remain unpaid. In most cases, the court will discharge all debts that are not secured by collateral, such as credit card debt or medical bills. This means that if the debtor does not have any assets to secure the debt, then the debt will be discharged. The court will also discharge all unsecured debts that are more than three years old, meaning that any debt that is more than three years old and has not been paid will be discharged. The court may also discharge some secured debts, such as a mortgage or car loan, if the debtor does not have the funds to pay off the balance. In this case, the court may allow the debtor to surrender the collateral and discharge the debt. However, the court may require the debtor to pay back some of the debt. In conclusion, the court will look at the debtor’s financial situation to decide which debts to discharge in a Chapter 11 bankruptcy. The court may allow the discharge of all unsecured debts as well as some secured debts, depending on the debtor’s ability to pay. In either case, the court will make sure that the debtor’s creditors receive a fair payment.

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

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