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

In a Chapter 11 bankruptcy, the court determines which of the debtor’s debts can be discharged. Dischargeable debts are those considered uncollectible, meaning that the debtor no longer has to pay them back. Generally, the court will look to the debtor’s financial condition, assets, and income to decide which debts to discharge. The court will also consider the risks associated with each debt and the likelihood of the debtor being able to pay them off in the future. The court may also look at any existing co-signers on the debts and whether they can pay them in full. In some cases, the court may also consider the public interest in discharging the debt, such as if the debt is considered to be part of a pattern of fraud or other illegal activities. In Tennessee, the court may also consider the debtor’s ability to make payments under a repayment plan. This means that the court may decide to discharge some of the debt while allowing the debtor to make installment payments on the remaining balance, rather than completely eliminating the debt. Ultimately, the court will make a decision based on all of these factors and whether or not the discharge of the debt would be in the best interest of the debtor, creditors, and public.

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

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