Question

Ways an irrecoverable debt may arise?

1) Bankruptcy of the debtor
2) Default on loan payments
3) Forgiveness of debt by the creditor
4) Death of the debtor

Answer 1

An irrecoverable debt may arise from the bankruptcy of the debtor, default on loan payments, forgiveness of debt by the creditor, or death of the debtor.

Step-by-step explanation:

An irrecoverable debt may arise in several ways:

1. Bankruptcy of the debtor: When a debtor declares bankruptcy, they are unable to pay back their debts, resulting in an irrecoverable debt for the creditor.
2. Default on loan payments: If a debtor fails to make regular loan payments, the debt becomes irrecoverable for the lender.
3. Forgiveness of debt by the creditor: In some cases, a creditor may choose to forgive a debt, making it irrecoverable.
4. Death of the debtor: If a debtor passes away without sufficient assets to repay their debts, the debts become irrecoverable.