The priority of claims established by Chapter Seven of the Bankruptcy Reform Act of 1978 gives priority to claims of
A) unsecured creditors over claims of secured creditors.
B) preferred stockholders over claims of unsecured creditors.
C) wages payable over claims of unsecured creditors.
D) farmers in grain storage over expenses of administering the bankruptcy.

Question

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Chapter Seven of the Bankruptcy Reform Act of 1978 gives priority to claims of wages payable over claims of unsecured creditors. This means wages owed to employees have a higher priority for payment than debts owed to other creditors in a bankruptcy proceeding.

The Priority of Claims Established by Chapter Seven of the Bankruptcy