Terry has 15 unsecured creditors and has decided to declare bankruptcy. On November 25, 2019 he pays in full his debt to one of the creditors (Acme Finance Company). One week later Terry files for bankruptcy. On behalf of the creditors the trustee makes a claim against Acme demanding that Acme turn over to the trustee the payment which was made to Terry. Is Acme obligated to do this?
A. No, as Terry filed for bankruptcy after the payment was made to Acme.
B. No, as Acme is a priority creditor.
C. Yes, as the payment to Acme was a preference
D. Yes, as the payment to Acme was a fraudulent transfer
Answer: C. Yes, as the payment to Acme was a preference
You might also like to view...
To create an escrow, there must be
a. a binding contract. b. unconditional delivery. c. real property. d. all of these.
What is the current APY on this credit card?
Bradley currently has a Visa card from his bank with the following terms: 21 percent on purchases, 25 percent on cash advances with a 3 percent cash-advance fee on the amount, and a default or penalty rate of 33 percent. His current statement shows a balance of $9,000. Lately, he has been having a hard time paying more than the minimum payment of 3 percent of his balance. A) 21 percent B) 22.99 percent C) 23.14 percent D) 24 percent