Question

Tim wrote a negotiable note. Subsequently, Tim's debts were discharged in bankruptcy. If a holder in due course presents the note for payment, Tim does not have to pay.
True / False.

Answer 1

Answer:

TRUE

Explanation:

Bankruptcy is a legal framework, in which borrowers who cannot pay their loans, may seek relief from all of their liabilities from individuals or other organizations. In most states, a judge's order mandates bankruptcy.

In this situation, Tim is a bankrupt person, tin wrote a negotiable note but now Tim has got relief from his liabilities, so he has not to pay against his negotiable note.

Therefore, the following situation is TRUE .