Question 1

Several commentators have criticized the bankruptcy code as too easily excusing individuals and businesses from honoring their lawful obligations.From a societal standpoint,do you believe that the bankruptcy code plays a positive role in social and economic relationships? What changes,if any,would you recommend?

Accepted Answer

The answer of Several commentators have criticized the bankruptcy code...

Question 2

Free met with Ara,the president of ABC Bank,to discuss Free's difficulty making the payments on a loan that was guaranteed by Shia.Free requested that Ara provide a grace period to Free and allow for a few missed payments without penalty in order to catch up other finances.Ara had no objection.Assuming the guaranty agreement did not address such situations,is Ara acting prudently and why or why not?

Accepted Answer

Ara should have obtained Shia's written consent for the grace period. This is because any modification to the terms of the loan, such as granting a grace period, could potentially affect the guarantor's obligations or the conditions under which the guarantor might be required to fulfill those obligations. Without Shia's consent, the bank risks the guaranty being challenged or invalidated, which could be imprudent from a risk management perspective.

Question 3

What is required in a filing for a voluntary petition in bankruptcy? An involuntary petition?

Accepted Answer

The answer of What is required in a filing for...

Question 4

What is a preference under the bankruptcy code? What time period is reviewed to determine if a preference has occurred? When does a long-term debt payment to a bank qualify under the ordinary course of business exception?

Accepted Answer

The answer of What is a preference under the bankruptcy...

Question 5

What five events referenced in the text usually constitute a default?

Accepted Answer

The answer of What five events referenced in the text...

Question 6

What portion of the bankruptcy code deals with an international insolvency situation,and how does it work? On what international law is it based?

Accepted Answer

The answer of What portion of the bankruptcy code deals...

Quiz 23: Debtor Creditor Relations And Bankruptcy

What is required in a filing for a voluntary petition in bankruptcy? An involuntary petition?

What is a preference under the bankruptcy code? What time period is reviewed to determine if a preference has occurred? When does a long-term debt payment to a bank qualify under the ordinary course of business exception?

What five events referenced in the text usually constitute a default?

What portion of the bankruptcy code deals with an international insolvency situation,and how does it work? On what international law is it based?