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

In a Chapter 11 bankruptcy case in Virginia, the court must decide which of the debtor’s debts should be discharged. This decision is based on federal bankruptcy law as well as state law. In general, the court will consider which debts are most likely to be repaid, and which debt should be discharged. The court will take into account the amount of debt owed and the ability of the debtor to repay it. The court will also consider the debtor’s circumstances, including the value of the debtor’s property and the amount of disposable income the debtor has each month to cover debt payments. The court will also look at the creditor’s position, including whether the creditor will be injured if the debt is discharged. The court may also consider the type of debt being discharged, such as student loan debt or taxes owed. Additionally, the court will look at any agreements between the debtor and creditor regarding the debt. The court may also consider any evidence that the debtor has no intention to repay the debt. This could include evidence of spending or transferring assets to avoid payment of the debt. In these cases, the court is likely to discharge the debt as the debtor has no realistic ability to repay it. Ultimately, the court will weigh all of these factors before making a decision about which debts should be discharged in the 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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