Universal Defenses Universal Defenses

Satisfactory Essays
Bankrupt is a person or organization declared in law unable to pay outstanding debt. When a company goes through bankruptcy, they attempt to allocate the debtor’s assets to the creditors in a fair and equitable fashion. Once the assets have been allocated, the debtor receives a discharge in bankruptcy A discharge in bankruptcy ordinarily bars the creditors from enforcing most of the debtor’s contracts. (Miller, R.) Defenses can bar collection from persons who would otherwise be primarily or secondarily liable on a negotiable instrument. There are two broad categories of defenses universal defenses and personal defenses. Universal Defenses Universal defenses (also called real defenses) are valid against all holders, including HDCs
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