Which One of the Following Statements About Bankruptcy Is True

question 107

Multiple Choice

Which one of the following statements about bankruptcy is true?

• A) Bankruptcy law is different in every province of Canada.
• B) Bankruptcy refers to a situation in which a debtor who cannot pay debts transfers his assets to the creditors directly.
• C) Bankruptcy law forces a debtor to pay all his debts, regardless of his financial position.
• D) All creditors of a bankrupt debtor are treated equally and will receive shares of the assets directly in proportion to how much is owed to each of them.
• E) A debtor who has been discharged from bankruptcy is free from recovery proceedings from most of his unsecured creditors previous to bankruptcy.

---

Definitions:

Corporate Income Tax

A tax imposed on the net income of corporations, calculated by deducting permissible expenses from gross income.

Federal Expenditures

Refers to the spending by the federal government, including spending on national defense, social security, and other public services.

National Debt

The total outstanding borrowing of a government, consisting of internal and external loans, accumulated over years of budget deficits.

Excise Taxes

Taxes imposed on specific goods or services, such as tobacco, alcohol, and gasoline, usually intended to discourage their use or generate revenue.