Bill Filed a Petition for Bankruptcy Under Chapter 7 of the Bankruptcy

question 26

Multiple Choice

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

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Definitions:

Socialization

The process through which individuals learn and internalize the values, norms, and behaviors that are considered appropriate in their society.

Childhood

The period in a human's life from birth to adolescence, characterized by growth, development, and learning within a familial and societal context.

Adult

A person who has reached maturity or legal age, typically characterized by finished physical growth and the assumption of responsibilities.

Charles Horton Cooley

An American sociologist known for his theory of the "looking-glass self," emphasizing the social nature of self-concept.