Min,a carpenter,has recently declared bankruptcy.She has one loan for $10 000 and,at the time when the bank calls for repayment,her total assets add up to $9000,which is made up of $3000 in tools,$1200 in clothing,and $800 in furniture.When her assets are distributed,which of the following is true?

Question

Quizplus · Accepted Answer

In a bankruptcy situation, the creditor (in this case, the bank) will receive payment before any assets are distributed to the debtor (Min). Based on the information given, the total value of Min's assets is $9000, which is less than the amount of her loan ($10,000). Therefore, it is likely that the bank will only receive a portion of the $9000, potentially up to the amount of the loan ($10,000), but more likely a lesser amount. However, it is not specified how much the bank is likely to receive, so option A (the bank is entitled to all $9000) and option E (Min will be discharged of all debt) are not correct. Option D is also incorrect, as Min has already declared bankruptcy. Option B is too specific and does not take into account other factors, so the best answer is C (the bank is probably only entitled to $5200).

Min,a Carpenter,has Recently Declared Bankruptcy