Lowell Recently Graduated from College with a Degree in Business

question 123

Essay

Lowell recently graduated from college with a degree in business administration, but has been unable to find a job.After consulting with a lawyer, he decided to file a Chapter 7 petition with the Bankruptcy Court.He has the following assets:
a.$1,200 in equity in a new car which he purchased with a loan from the bank.b.$5,000 in equity in a condominium secured by a mortgage.c.$100 a week in unemployment benefits after being laid off from his job at a local restaurant.d.$750 in business administration books including a hardly used copy of Mann and Roberts, Essentials of Business Law and the Legal Environment.e.a $1,000 retainer for his teeth prescribed by his orthodontist.His debts are as follows:
a.$10,000 in student loans.b.$20,000 to the bank for his car which is secured by the car.c.$5,000 in unsecured credit card debts.What can he keep? What will each of the creditors receive? Explain.

---

Definitions:

Accounts Payable

Refers to the amounts a company owes to creditors for items or services purchased on credit.

Notes Payable

A liability in a company's balance sheet that records amounts the company owes because it borrowed money, or a formal written agreement to pay a specific amount in the future.

Maturity Value

The amount of the note that is due on the date of maturity (Principal + Interest).