Wajiha is a full-time employee of ABC Corporation and earns $5,000/month and she has not been paid her wages for the last month. Wajiha is owed $5,000 in wages by her corporate employer. Xiufen is an unsecured creditor of ABC Corporation and is owed $10,000 on a loan given to the corporation. Both Wajiha and Xiufen have just learned that ABC Corporation has declared bankruptcy and a Trustee in Bankruptcy has been appointed on behalf of ABC Corporation. 

(a) How much of Wajiha's owed wages are recoverable in this situation? 

(b) Of these two creditors Wajiha or Xiufen, explain who will be paid their debt first and why

Answer rating: 100% (QA)

a i In the case of Wajiha employees are typically considered priority creditors in a bankruptcy ... View the full answer