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

In New Jersey, the court decides which debts to discharge in a Chapter 11 bankruptcy based on a variety of things. The type of debt, whether or not the debtor can pay it, as well as any other facts or circumstances the court may consider, all play a role in making the determination. If the court finds that the debtor has the ability to pay the debt, and that the debt is dischargeable, the court will usually grant the discharge. If the court finds that the debtor does not have the ability to pay the debt, or if the debt is not dischargeable, the debt will remain with the debtor. The court will also take into account any special circumstances that may be present in the debtor’s case. This includes things like the debtor’s financial condition, the purpose of the debt, the debtor’s ability to file for bankruptcy, and whether or not the debt is secured or unsecured. The court will also take into consideration the best interests of the creditors. For example, if a secured creditor has a claim against the debtor, but the debtor can no longer pay the debt, the court may grant the debtor a discharge if it is found that the creditors would not be paid any more money if the debtor were to continue making payments. The court will ultimately decide whether or not to grant the discharge, and which debts to discharge, based on the best interests of the creditors, the debtor, and the nature of the debt.

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

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