Martina Is a Bankrupt Student

Martina is a bankrupt student. Her debts exceed $200 000. Of that total amount, $50 000 is owed in student loans. Her assets, in contrast, are worth only $100 000. Included in that total are (i) clothing worth $5000, (ii) household furnishings worth $7000, and (iii) $20 000 in insurance proceeds. Which of the following statements is TRUE?

A) Martina is entitled to keep her clothing, largely because it is difficult for the trustee in bankruptcy to realize a substantial profit by selling used clothes.
B) Although her situation currently seems bleak, Martina will be debt free once she is released from bankruptcy.
C) Martina is entitled to retain $4000 worth of household furnishings.
D) Martina is entitled to retain all of the money that she received under the insurance policy.
E) None of the above.