Davaros Debtor is a New Jersey resident who is thinking about filing for bankruptcy. The debtor has been employed in the past by ABC Corporation where he made $75,000 a year. As ABC Corporation hit hard financial times, Debtor was laid off. The debtor is currently working, but took a cut in salary to be employed and is making $45,000 a year. When Debtor was out of work, he was injured and amassed $100,000 in medical bills as he didn't have insurance. Of this amount, around $20,000 is due to Dr. Detroit, and the remaining $80,000 is owed to General Hospital. A debtor also has $50,000 in credit card debt on his Visa card. The mortgage on the home where he currently resides is $350,000. The debtor is currently separated from his spouse, to whom he owes around $12,000 in child support. The debtor is still paying off loans from his undergraduate education to Sally Mae. While still employed at ABC, Debtor purchased a summer home at the New Jersey shore. Purchased for $200,000, he sold the home around a year ago for $75,000 to a distant cousin. 

Required

Is Debtor a candidate for bankruptcy protection? Why or why not? If Debtor isn't a candidate for bankruptcy protection, is there anything that Debtor can do to become eligible to file for bankruptcy protection? If so, what Chapter should Debtor file under? In your answer, identify why you've selected the Chapter that you have.

Answer rating: 100% (QA)

Explanation Based on Personal bankruptcy protection Personal bankruptcy protection Debtor is qualifi... View the full answer