Identify and describe the three major sections of the Bankruptcy Act.
What will be an ideal response?
ANSWER: Bankruptcy was designed for three major reasons. One is to guarantee that assets will be fairly divided among creditors. The second is to protect debtors from losing too many of their assets. And debtors are protected from unreasonable demands of creditors. There are three major sections of bankruptcy for small business. Chapter 7 is straight bankruptcy, or liquidation. In Chapter 7, the debtor forfeits all assets of a business, which a court-appointed trustee then sells. All receipts are then divided among the creditors. Chapter 7 allows the debtor to be relieved of all obligations. Chapter 11 is known as reorganization. In this proceeding, the debtor pays a portion of the debt and the remainder is relinquished. The debtor is then allowed to continue his or her venture. Chapter 13 allows the debtor to repay the debt over a longer period of time. Chapter 13 avoids declaration of bankruptcy and allows payment in installments and protection by the court.
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Indicate whether the statement is true or false
The face value of Accounts Receivable plus the balance in the Allowance for Doubtful Accounts is equal to the net realizable value of the receivables.
Answer the following statement true (T) or false (F)
Sid induces Ty to enter into a contract for the sale of a warehouse about which Sid fraudulently misrepresents a number of material facts. Sid also tells Ty that his commission is 6 percent, but their signed, written contract states "12 percent." The parol evidence rule governs
A. contracts that are induced by fraud. B. contracts that must be in writing to be enforceable. C. the admissibility in court of oral evidence. D. the reformation of oral and written statements into one contract.
Dairy Products, Inc, and Eden Farms Corporation form a joint venture to make and test-market Frosty Ice Cream. A joint ven¬ture is usually formed for
a. an implied duration of not more than six months. b. a single transaction or project. c. a stated duration of not more than one year. d. a perpetual existence.