Question

Discuss your agreement or disagreement with the following statement. In a bankruptcy proceeding, the debtor is not entitled to anything and the creditor is entitled to everything. Be specific and justify your response.

Answer 1

Explanation:

Bankruptcy: it may be termed as a situation where a person or an entity is unable to pay its debt and it files in application with court to declare them bankrupt.
so, that they can get some relief from some or all of there debt.
After declaration of bankruptcy, the Assets of an entity are liquidated and creditors are paid proportionately as per terms and condition of us law of bankruptcy.

Creditors: is a person who owns money from an organisation for various reasons, either for supplied goods or services, or he has finance any of the business activities, or give loan.
There are three types of creditors secured creditor , unsecured creditor and preferred creditor.

In the given situation, I disagree to the given statement that "debtors are not entitled to anything and creditors are entitled to everything."

As per chapter 7 , The redemption of customer debt which is secured by appropriate tangible assets.
The debtors redeems tangible asset by purchasing it back at replacement value.
The replacement value can be lower than the owned dept to the organisation.

where the debtors files bankruptcy petition to the court takes 2 steps:
1. Either surrender the tangible assets.
2. or pays off the dept to the creditor over a period of 5 years.

Creditors :
The secured creditors have the right to liquidate the asset against which the amount is secured and recover the amount.
They have the top priority at the time of liquidity or bankruptcy.

Unsecured creditor has to file a claim along with evidences and have to attend first meeting of creditors.
They have the right to inquire bankruptcy petition filed and the documents submitted to the court.
If they have an any issue they can file objection with court.
However large number of unsecured creditor may remain unpaid and could be disposed of in chapter 13.

It can be concluded that not all the creditors are entitled to everything at the time of bankruptcy.

Therefore, the given statement is not true.