CONTRACT LAW 2
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Assignment: Select one of the following questions to serve as your essay:
- Should the law allow debtors to avoid payment of their debts if those debts cause the debtors to lose
their homes or suffer other extreme hardship?
- Should a business be able to erase its obligations to workers if those obligations would cause the
business to be unable to pay dividends to its shareholders?
- Should a student ever be able to obtain forgiveness of her obligation to pay tuition?
- Should a parent ever be able to obtain forgiveness of his obligation to pay child support?
The law should exempt the payment of debts in some circumstances especially if this is
likely to cause extreme hardships to the debtor. The law has tried to play a pivotal role in this
through providing channels that can exempt debtors from paying most of their debts.
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One of the way through which a debtor can be allowed to cancel his/her debt is through
filing for bankruptcy. The debtor can file for bankruptcy under chapter 7. In this type of
bankruptcy, the debtor seeks for the court to cancel most his/her debts but some assets that were
not exempted during the making of the contract will have to be sold by the trustee to pay off the
creditors. For one to be eligible for this type of exemption, he/she must show that his/her income
does not exceed a certain set limit. This is meant to show that the debtor cannot reasonably pay
off the debt and that the actions of the debtors are not mala fide. (Miller & Jentz, 2011, pg 530)
However, there is an exemption to the types of debts that a debtor can be exempted from
paying. This chapter does not cancel the following types of debts; income taxes that have
accumulated over the past three years, student loans in cases where the individual does not
qualify for hardship discharge, child and spousal support, damages to be paid to an individual
who was injured by the debtor while operating a locomotion machine under the influence of
substance(s). (Strike Debt [Movement], 2014, pg 154)
Personally, I think that the law should also provide means through which debtors can be
exempted from paying their debts in all types of circumstances so long as the debtor is able to
prove beyond reasonable doubt that he/she cannot pay off the debts and that they are acting in
Miller, R. L. R., & Jentz, G. A. (2011). Business law today: Text & summarized cases : e-
commerce, legal, ethical, and global environment. Mason, Ohio: South-Western Cengage
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Strike Debt (Movement). (2014). The debt resisters’ operations manual. Oakland, CA: