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Suppose a friend of yours is insolvent and asks for your assistance in choosing between filing for a straight bankruptcy under Chapter 7 and filing
Suppose a friend of yours is insolvent and asks for your assistance in choosing between filing for a straight bankruptcy under Chapter 7 and filing under Chapter 13. Your friend has multiple debts including a mortgage to Citi Bank, student loan debt, unpaid income taxes, child support payments, a loan from Ally Financial for her car, a $10,000 loan she incurred for a bike that she bought last month, and credit card debt.
Based on the scenario above, answer each of the following questions as completely as possible:
- Describe to your friend the major differences between the Chapter 7 and Chapter 11 proceedings. (10 points)
- Explain why Chapter 11 is not applicable in this case. (5 points)
- If your friend does file bankruptcy, what property would be exempt? (5 points)
- Which of your friends debts would not be dischargeable in bankruptcy and why? (5 points)
- Assume your friend decides to file Chapter 7 bankruptcy, but does not have enough assets to satisfy all of her debts. Which creditors would have priority? (5 points)
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