Which of the following debtors would not be allowed to seek bankruptcy relief un
ID: 377986 • Letter: W
Question
Which of the following debtors would not be allowed to seek bankruptcy relief under the provisions of Chapter 13 of the Bankruptcy Act?
Question 18 options:
A corporation owing $100,000 in unsecured debt and $1,020,000 in secured debt.
A doctor who has $1,102,560 in secured debt.
A lawyer who has $1,235,000 in total debt.
A banker who has $307,124 in unsecured debt.
All of the above would be barred from Chapter 13. They each exceed one or more of the debt ceilings that apply to Chapter 13.
None of the above would be excluded from Chapter 13. They are all under the debt ceilings and are all eligible for cChapter 13 relief.
A corporation owing $100,000 in unsecured debt and $1,020,000 in secured debt.
A doctor who has $1,102,560 in secured debt.
A lawyer who has $1,235,000 in total debt.
A banker who has $307,124 in unsecured debt.
All of the above would be barred from Chapter 13. They each exceed one or more of the debt ceilings that apply to Chapter 13.
None of the above would be excluded from Chapter 13. They are all under the debt ceilings and are all eligible for cChapter 13 relief.
Explanation / Answer
Answer :(A) A corporation owing $100,000 in unsecured debt and $1,020,000 in secured debt is not allowed to seek bankruptcy relief under the provisions of Chapter 13 of the Bankruptcy Act.
Chapter 13 includes provides eligiblity to seek bankruptcy relief in following cases :
1. Individual's unsecured debts are less than $3,94,725
2. Individual's secured debts are less than $1,184,200
3. Total debts are less than $ 1,578,925
Corporations are not allowed to file for relief under chapter 13 of Bankruptcy Act.. Corporations those are Bankrupt and wants to reorganise by continung their operation, are covered under Chapter 11 of Bankruptcy Act and if they end their operations then they are covered under Chapter 7 of Bankruptcy Act.
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