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

In North Carolina, the court will decide which debts to discharge in a Chapter 11 bankruptcy based on the evidence presented by the debtor and creditor. The court will consider all of the evidence, including the types of debt, the amount of debt, the debtor’s ability to pay the debt, and any potential fraud or wrongful conduct on the part of either party. In general, the court is looking for evidence that the debtor is unable to pay the debt and that discharging the debt is the best course of action. When determining which debts to discharge, the court will review the types of debt owed and consider which ones are more essential to pay than others. Priority debts, which include taxes and child or spousal support, will be more likely to be discharged than unsecured debts, such as credit card debt or medical bills. The court will also consider the amount of debt owed and the debtor’s ability to pay. If the debtor is unable to pay the debt, the court will likely discharge the debt. The court may also take into consideration any acts of fraud or wrongful conduct on the part of either party in order to decide which debts to discharge. If the court finds that the debtor has engaged in fraud or any form of wrongful conduct, the court may opt to not discharge the debt. Ultimately, the court will take all factors into account when deciding which debts to discharge in a Chapter 11 bankruptcy.

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

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