Quiz 36: Bankruptcy
Bankruptcy proceedings: An individual should not allow filing under the chapter 7, as usual involvement of partnership and corporation. Yes, the debt of J is dischargeable based on chapter 7. Because, the court granted J that the dischargeable debt is $1 million. Considering that, the firecracker accident was not a planned injury to R.
A bankruptcy trustee is required to collect the bankrupting party's assets and distribute them. In this case, the $21,000 is not part of H's assets because it was paid back to B. H had been liable to B for payments and was required to pay on them. The bankruptcy trustee cannot recall a previously paid debt. Although H's other debtors may not think it is fair, B received the money before Chapter 7 was filed.
The answer is D. Chapter 7 filing does not require that a debtor's liabilities exceed his or her assets.