Ridland Has Had Severe Problems Staying Out of Debt

question 45

Multiple Choice

Ridland has had severe problems staying out of debt. He has several creditors who wish to file a garnishment against his wages. Can all of the creditor's file the garnishment at once?

• A) Yes, all of the creditors can take a portion of the wages to satisfy Ridland's debt.
• B) Yes, the court will collect the garnished wages and divide the money up amongst the creditors.
• C) No, only one garnishment will be permitted at a time, and the first creditor to file will usually receive the garnished wages.
• D) No, only one garnishment will be permitted at a time, and the creditor with the largest claim will usually receive the garnished wages.
• E) No, only one garnishment will be permitted at a time, and the creditor with the smallest claim will usually receive the garnished wages.

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Definitions:

Voting Rights

The rights of shareholders to vote on key corporate decisions, such as the election of the board of directors.

Preemptive Rights

The rights that give existing shareholders the opportunity to buy additional shares of a company's new stock issue before the public, maintaining their percentage of ownership.

Retained Earnings

The portion of net income that is retained by the corporation rather than distributed to its owners as dividends, typically used for reinvestment in the business or paying down debt.

Stockholders' Equity

The remaining interest in a company's assets after all debts have been subtracted, indicating the owners' stake.