Skip to content

CS Professional · Insolvency and Bankruptcy - Law and Practice · Bankruptcy Order for Individuals and Partnership Firms

While administering the estate of a deceased bankrupt, the trustee pays all debts in full along with costs of administration and interest as provided under section 178, and a surplus of Rs 2,50,000 remains. What should be done with the surplus?

The surplus goes to the legal representatives of the estate of the deceased bankrupt, or is dealt with in the prescribed manner. This arises only after all debts, costs of administration and interest under section 178 have been paid in full.

  1. APaid to the legal representatives of the deceased bankrupt's estate, or dealt with as prescribedCorrect
  2. BDistributed among the creditors in proportion to debts
  3. CDeposited with the Debt Recovery Tribunal as a penalty
  4. DRetained by the trustee as additional remuneration

Explanation

Once all debts, costs and interest are paid in full, any surplus in the trustee's hands is paid to the legal representatives of the deceased bankrupt's estate or dealt with as prescribed. Creditors have already been paid in full, so further distribution to them is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Bankruptcy Order for Individuals and Partnership Firms shows your real accuracy, how long you take and where you lose marks.

Practise Bankruptcy Order for Individuals and Partnership FirmsFree diagnostic mock

More Bankruptcy Order for Individuals and Partnership Firms questions