7
QuizMultiple Choice

How Credit Works

Question 7 • AA - F26 Personal Finance and Economics

Calvin and Trish started a cleaning company, but unfortunately their competitors offered lower prices, and the company failed. Calvin and Trish had borrowed $20,000 to start the business.What is one consequence they would face if they go through bankruptcy?

Answer
A
They will face legal charges.
B
Their credit will be impacted for several years.
C
They will be prohibited from getting a future business loan.
D
They will have to pay back the full loan along with all interest.

Explanation

Bankruptcy can remain on a person’s credit history for several years, making it harder to borrow money or get favorable credit terms. It does not automatically mean Calvin and Trish will face legal charges, be barred from future business loans, or have to repay the full loan with all interest. The correct choice is “Their credit will be impacted for several years.”

AI-written and checked against the verified answer.

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