15
QuizMultiple Choice

Bankruptcy

Question 15 • [PERFIN] Personal Finance, Sem 2 (26-27)

Which of the following phrases best summarizes Chapter 7 bankruptcy?

Answer
A
discharge debt and keep property
B
discharge debt and liquidate assets
C
reorganize debt and keep property
D
reorganize debt and liquidate assets

Explanation

Chapter 7 bankruptcy is commonly called liquidation bankruptcy: a trustee may sell nonexempt assets to repay creditors, and eligible debts can then be discharged. Therefore, “discharge debt and liquidate assets” best summarizes Chapter 7. Reorganizing debt is more closely associated with Chapter 13 bankruptcy.

AI-written and checked against the verified answer.

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