Cengage Advantage Books: Introduction to Business Law 4th Edition by Timothy Koch, Jeffrey Beatty, Jeffrey Beatty, Susan Samuelson, Susan Samuelson

Exercise 15

CPA QUESTION Unger owes a total of $50,000 to eight unsecured creditors and one fully secured creditor. Quincy is one of the unsecured creditors and is owed $6,000. Quincy has filed a petition against Unger under the liquidation provisions of Chapter 7 of the federal Bankruptcy Code. Unger has been unable to pay debts as they become due. Unger's liabilities exceed Unger's assets. Unger has filed papers opposing the bankruptcy petition. Which of the following statements regarding Quincy's petition is correct
(a) It will be dismissed because the secured creditor failed to join in the filing of the petition.
(b) It will be dismissed because three unsecured creditors must join in the filing of the petition.
(c) It will be granted because Unger's liabilities exceed Unger's assets.
(d) It will be granted because Unger is unable to pay Unger's debts as they become due.