Question with Sample Answer—Voluntary versus Involuntary Bankruptcy. Burke has been a rancher all her life, raising cattle and crops. Her ranch is valued at

$500,000, almost all of which is exempt under state law.

Burke has eight creditors and a total indebtedness of $70,000.

Two of her largest creditors are Oman ($30,000 owed) and Sneed ($25,000 owed). The other six creditors have claims of less than $5,000 each. A drought has ruined all of Burke’s crops and forced her to sell many of her cattle at a loss. She cannot pay off her creditors. (See pages 552–554.)

1. Under the Bankruptcy Code, can Burke, with a $500,000 ranch, voluntarily petition herself into bankruptcy? Explain.

2. Could either Oman or Sneed force Burke into involuntary bankruptcy? Explain.

—For a sample answer to Question 21–2, go to Appendix G at the end of this text.