Question
Andrew has operated a gardening business for the past 5 years. He operates the business as a sole proprietorship. Over the past 3 years, he
Andrew has operated a gardening business for the past 5 years. He operates the business as a sole proprietorship. Over the past 3 years, he has accumulated significant amount of debt and is receiving calls from his creditors on a daily basis. Hes at the point where he is unable to keep up with all of the payments and continues to go into debt. He has decided to voluntary assign himself into bankruptcy and a trustee has been appointed. The trustee asks to review his liabilities and Andrew provides him the following list: (1) mortgage (home) - $500,000 (2) truck loan - $30,000 (3) loan from friend Roger $40,000 (4) credit card - $75,000 (5) loan from parents - $250,000 (6) Revenue Canada unpaid taxes $500,000 The trustee has not yet sold Andrews assets. From the list of liabilities, identify which liability would be considered to be a secured creditor and which one would be a unsecured creditor and what order would they get paid
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