Which of the Following Statements Is Most Accurate Regarding the Legal

question 5

Multiple Choice

Which of the following statements is most accurate regarding the legal capacity of bankrupts to enter contracts?

• A)Bankrupts must declare they are bankrupt in the first six months of their bankruptcy.
• B)Bankrupts cannot enter a contract where the sum involved is approximately $6000 or more.
• C)Bankrupts cannot enter a contract where the sum involved is approximately $4900 unless they declare they are bankrupt.
• D)Bankrupts cannot enter into any contracts during the term of their bankruptcy.

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Definitions:

Escrow Agent

A neutral third party responsible for holding assets or documents until certain conditions of an agreement are met.

Lender

An individual or institution that provides funds to another with the expectation of repayment plus interest.

Title Examination

The process of reviewing public records to determine and confirm a property's legal ownership, and to identify any claims, defects, or encumbrances that may affect the title.

Title Insurance Company

A company that issues insurance policies to protect purchasers and lenders in real estate transactions from losses due to title defects.