Domenico is a tradesman who works as an independent contractor.When the economy went into a recession and new construction projects dried up,he found it impossible to make ends meet.As a result,he has stopped meeting his debts as they fell due.Which of the following statements is TRUE?

Question

Quizplus · Accepted Answer

Domenico's failure to pay his debts as they fall due constitutes an act of bankruptcy. This means that he can be put into bankruptcy through a creditor's application for a bankruptcy order. A court may also issue a receiving order if Domenico enters bankruptcy through assignment, but this is not the only route to bankruptcy. Option A is incorrect as bankruptcy has not been established yet. Option B is incorrect as both assignment and creditor's application can lead to bankruptcy. Option D is incorrect as it is not the only route to issuing a receiving order. Option E is incorrect as Domenico is clearly insolvent due to his inability to pay his debts.

Domenico Is a Tradesman Who Works as an Independent Contractor