The question (15 marks)
Distinguish between claim, debt and default under the Code, and explain why the Code is triggered by default rather than by insolvency. (15 marks)
MU Module I, head 1.2.
Plan your answer on paper before you look at the authorities — issue first, then the rule, then apply it to these facts.
It tests Unit 1 · Foundations of the Code of Bankruptcy Laws.
Authorities you will need
- Sections 3(6), 3(11) and 3(12) of the Code
- Sections 4 and 78 of the Code
- Section 6, which makes default the sole trigger
- Sections 5(8) and 5(21), which divide debt into financial and operational debt
How an answer is marked
A full-marks answer names the issue in one line, states the rule with its section, cites the authority, applies it to these facts and concludes — in that order. The app's model answer for this question is written in exactly that shape, with a checklist to mark your own attempt against.