Bankruptcy

Bankruptcy

Write a short essay, between 400 and 500 words, responding to the discussion question below. You are expected to utilize the textbook and outside resources to provide accurate and substantive answers to the question. Also, be sure to make use of illustrating examples where appropriate. Submit your work in APA format.

What are some of the factors that might be considered in deciding whether a debtor should be allowed to declare bankruptcy? Why are these factors important?

Bankruptcy

Edgar Allen Doe

John Doe University

BA265- Business Law II

14 January 2013

Bankruptcy

What can a debtor do when he or she is in a financial situation that causes him or her burden to the point that there are not enough funds to pay the creditors? For some the solution is filing for bankruptcy. Is bankruptcy the best solution for the debtor? Are there other avenues the debtor can take to reduce his or her debt? Before a company or individual files for bankruptcy, they should look at all options and review their financial situation to determine whether bankruptcy is their best option. There are some factors considered in the determination of whether a debtor can file for bankruptcy.

First, the type of debt the debtor owes has a significant impact on whether the debtor can file for bankruptcy. Is the debt dischargeable under bankruptcy law? Filing for bankruptcy does not eliminate certain debts. Some of the debts that are not discharged, according to Miller and Hollowell (2011), “Claims for back taxes accruing within two years prior to bankruptcy, domestic support obligations and property settlements, and certain student loans unless payment of the loans causes an undue hardship” (p. 462). This is only a few debts that a debtor cannot claim for discharge under the bankruptcy code. Therefore, if the debtor’s debts are primarily exceptions to discharge, such as alimony or child support, the debtor cannot expect to have their burden of debts...