214k views
0 votes
Bill filed a petition for bankruptcy under Chapter 7 of the Bankruptcy Act. Bill listed, among others, the following debts: a debt to the National Bank for $10,000 secured by his 1980 truck, which is valued at $3,500; an unsecured debt to his friend, Francis; a $500 debt to the IRS for 1989 federal income taxes; and a $500 student loan to the university which was due one year ago. In this scenario, _____.

a. the $500 debt to the IRS is a nondischargeable debt
b. Francis can claim the debt without filing a proof of claim
c. the $500 student loan to the university is a dischargeable debt
d. the bank can receive preferential payment because the debt owed to it is the highest

User Joe Allen
by
8.1k points

1 Answer

3 votes

Answer:

a. the $500 debt to the IRS is a nondischargeable debt

Step-by-step explanation:

The $500 debt to the IRS is a nondischargeable debt .

Certain debts are not affected by the discharge of a bankrupt debtor and the bankruptcy code provides the discharge as well.

User JoshuaJ
by
7.9k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories