Question

Jake, a businessman, filed for bankruptcy and was declared insolvent by the courts. He owed $15,000 each to two creditors and $5,000 each to two others. The courts also decreed that he should sell his house worth $30,000, to pay his debts. Which of the following is legally permissible in this scenario?

a. Jake is entitled to sell his house and pay the creditors he owes the least amount of money to.
b. Jake is entitled to sell his house and pay whomsoever he chooses.
c. Jake is entitled to sell his house and pay the creditors he owes the maximum amount of money to.
d. Jake is entitled to sell his house and pay the creditors on a pro-rata basis.

Answer 1

Option D is the best which state that Jake is entitled to sell his house and pay the creditors on a pro-rata basis

Step-by-step explanation:

Based on the information given about Jake in which we were been told that Jake owed the amount of $15,000 each to two of his creditors and another amount of $5,000 each to two others creditors we can vividly say that Jake is entitled to sell his house which worth the amount of $30,000 and pay the creditors on a pro-rata basis by given the amount he owed to one of the creditors based on to their share of the total or whole amount .