Claims to Funds

question 102

Multiple Choice

Claims to Funds.Paul had a great job as a bank executive.Unfortunately,his bank came under scrutiny by federal regulators,and although Paul had done nothing illegal,he ended up being fired.Unfortunately for Paul,he had a number of debts.Among his assets were a house worth $250,000 on which he owed $150,000 to a bank that held a security interest; three vehicles; an expensive watch worth $5,000; and $120,000 in an Individual Retirement Account (IRA) .He owed $900 per month in child support to his ex-wife Suzy and was behind on payments in the amount of $1,800.He also owed $2,000 in wages consisting of four months of back pay to Bob who took care of Paul's landscaping needs and swimming pool care.Unable to find a job and believing that he had no other option,Paul filed for Chapter 7 bankruptcy.All creditors angrily demanded payment from liquidation of Paul's assets.Paul,on the other hand,claims that he needs all the above-mentioned assets and that he should not have to give up anything.Only federal bankruptcy exemptions apply to Paul's case.Which of the following is true regarding Paul's claim to his vehicles?

• A)All vehicles will be sold,with the entire proceeds being used to satisfy claims of creditors.
• B)All vehicles will remain Paul's property because vehicles are automatically exempt.
• C)One vehicle with the least value will remain Paul's property as an exemption,and the others will be sold to satisfy the claims of creditors.
• D)An interest in a motor vehicle up to $3,675 is exempt.
• E)An interest in a motor vehicle up to $5,000 is exempt.

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Definitions:

Bereavement

The state of sorrow over the death or departure of a loved one, characterized by a range of emotional responses.

Posttraumatic Stress Disorder

A mental health condition triggered by experiencing or witnessing a terrifying event, characterized by flashbacks, nightmares, and severe anxiety.

Mental Health

A state of well-being in which an individual realizes their own abilities, can cope with the normal stresses of life, can work productively, and can make a contribution to their community.

Disenfranchised Grief

Grief that cannot be openly acknowledged, socially sanctioned, and publicly shared.