Assignment 12.docx - Assignment 12 1 a Petition the...

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Assignment 12 1. a. Petition: the document filed when a person wishes to declare bankruptcy Preferential transfers: when the debtor pays certain creditors a large amount of the debt but not other creditors in preparation for filing bankruptcy Chapter 7 bankruptcies: nonexempt assets are sold, the proceeds are given to the creditors and any remaining debt is forgiven b. Bankruptcy rules prevent preferential transfers when debtors rush to pay or transfer property right before they petition for bankruptcy. Therefore, the court would rule against Johansen in the recovery of the restitution payments they made to Triple X 90 days before the petition was filed. Furthermore, since the Johansen’s are likely filing for a chapter 7 bankruptcy, then it would not make since to return the restitution payments to them only to have Triple X receive it back through the bankruptcy process. c. On the surface, allowing bankruptcies is not ethical. If people make a promise to pay money, they should be held accountable for that. It is not fair to the persons or businesses who lose money when
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