February 29, 2020 / 12:50 AM / a month ago

IN BRIEF: Ch. 7 discharge wipes out debtor’s personal guaranty - bankruptcy court

Deciding a case of first impression, the Bankruptcy Appellate Panel (BAP) of the 6th U.S. Circuit Court of Appeals held Friday that a discharge in bankruptcy also discharges the debtor’s obligations under a pre-petition personal guaranty.

The BAP acknowledged that bankruptcy and district courts across the country have split on that question, but concluded that treating the guaranty as a discharged contingent liability is more consistent with the Bankruptcy Act’s broad definitions of “claims” and “debts” and its purpose of giving the debtor a fresh start.

To read the full story on Westlaw Practitioner Insights, click here: bit.ly/2VAiN9x

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