Creditors want to file an involuntary Chapter 7 bankruptcy petition against Debtor Corp. Debtor Corp has 15 creditors with total unsecured claims of 0,000. What is the minimum requirement to file the petition?

Answer options:

At least 1 creditor with an unsecured claim of at least ,775.

At least 3 creditors with aggregate unsecured claims of at least ,775 (adjusted for inflation).

At least 50% of creditors holding 2/3 of the debt.

Any creditor owed more than ,000.

How to approach this question

Check the creditor count: <12 creditors = 1 filer needed. >=12 creditors = 3 filers needed. Aggregate debt must exceed threshold.

Full Answer

B.At least 3 creditors with aggregate unsecured claims of at least ,775 (adjusted for inflation).✓ Correct

Under the Bankruptcy Code, if a debtor has 12 or more creditors, an involuntary petition requires at least 3 creditors to file, with aggregate unsecured claims meeting the statutory threshold.

Common mistakes

Forgetting the '12 or more creditors' rule and assuming 1 creditor is always enough.

Question 17 All questions Question 19

Practice the full CPA REG Practice Exam

72 questions · hints · full answers · grading

More questions from this exam

Q01Under Circular 230, which of the following scenarios represents a permissible contingent fee arra...Hard Q02A CPA is preparing a tax return for a client who wishes to take a position that the CPA believes ...Medium Q03Regarding the retention of client records under Circular 230, which of the following statements i...Hard Q04Under the Ultramares rule regarding accountant liability to third parties for negligence, which o...Medium Q05Taxpayer A filed their Year 1 tax return on April 15, Year 2. The return omitted ,000 of gross in...Medium

View all 72 questions →