A bankrupt person who has not been guilty of certain

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their income, but they have not done anything to break the law. A bankrupt person who has not been guilty of certain dishonest acts and has fulfilled his duties as a bankrupt is entitled to a discharge in bankruptcy. A discharge relieves the bankrupt person of further responsibility for dischargeable debts and gives him them a fresh start. (Mallor, Barnes, Bowers & Langvardt, 2013 pg. 802) Chapter 7 Liquidations: (Mallor, Barnes, Bowers & Langvardt, 2013 pg. 791) Advantages: Mr. Brown is unemployed so he will not be required to offer the creditors a monthly repayment plan An order of Automatic stay will be established and creditors will not be permitted to contact the debtor (Mallor, Barnes, Bowers & Langvardt, 2013 pg. 792) The Brown’s will receive bankruptcy counseling to help in finances later Disadvantages: The Brown’s will have to pay their student loans, federal taxes, and secured loans All non-exempt assets will be turned over to the bankruptcy trustee for liquidations to pay creditors Their credit score will decrease drastically, and will be reported for ten years Chapter 13: (Mallor, Barnes, Bowers & Langvardt, 2013 pg. 816) Advantages: The Browns could keep exempt and non-exempt property Interest on loans can be reduced to help in complying with payments/ their loans terms can be extended to meet their needs Foreclosure on their home can be delayed Disadvantages: All the Browns debts may not be discharged under Chapter 13 Neither Brown is currently working, making a payment plan will be extremely difficult and affect their lifestyle Their credit will decrease and reported of 7 years Mallor, J., Barnes, A. J., Bowers, L. T., & Langvardt, A. (2013). Business Law, the Ethical, Global, and e- Commerce Environment. McGraw-Hill/Irwin.
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