Chapter 7,8,9 Test Review

Landlords are responsible for all of the following except a. monitoring guests b. fixing plumbing problems c. repairing roofs d. providing door locks

A

The maximum amount of a dispute that may be filed in a small claims court is usually less than a. $5,000 b. $1,000 c. $10,000 d. $50,000

A

Which of the following approaches to bankruptcy avoidance is likely to require the debtor to pay high fees for the services provided? a. debt settlement program b. credit protection service c. credit counseling service d. debt management plan

A

Which of the following carries the most weight when calculating a FICO score? a. payment history b. amounts owed c. length of credit history d. types of credit used

A

Which of the following is a closing cost when purchasing a house? a. loan assumption fee b. down payment c. title fee d. mortgage

A

Which of the following is an example of a charge card? a. American Express b. Visa c. Discover d. MasterCard

A

Which of the following is the first step of a buying plan? a. define a spending goal b. list items that will meet the goal c. describe features of the ideal choice d. set a timeline

A

Bankruptcy exemptions may include which of the following? a. clothing b. all of these c. tools of a trade d. a limited amount of home equity

B

Implementing a buying plan involves all of the following except a. comparison shopping b. setting a spending limit c. making a purchase d. evaluating the purchase

B

The Truth in Lending Act requires which of the following to be put in writing before a loan or credit agreement is signed? a. the annual percentage rate b. all of these c. the total finance charge and method of computing it d. any service fees or other costs added to the price

B

The highest level of alternative dispute resolution (ADR) is a. mediation b. arbitration c. litigation d. negotiation

B

The legal process that allows a lender to take possession of a house because the borrower does not meet his or her mortgage obligations is called a. garnishment b. foreclosure c. bankruptcy d. discharge

B

Which of the following is a disadvantage of credit? a. decreased purchasing power b. overspending c. security d. inconvenience

B

Which of the following is not a major credit bureau? a. TransUnion b. Experian c. Equifax d. Fair Isaac and Company

B

Which of the following is not an advantage of home ownership? a. tax deductions b. depreciation c. equity d. privacy

B

Which of the following is not an example of easy access credit? a. title loan b. upside-down loan c. equity stripping d. payday loan

B

Which of the following laws grants you the right to know what is in your credit file? a. Truth in Lending Act b. Fair Credit Reporting Act c. Credit Card Act of 2009 d. Fair Credit Billing Act

B

Which type of bankruptcy results in the discharge of all debts except for a few specific types of debt? a. Chapter 11 bankruptcy b. Chapter 7 bankruptcy c. all of these d. Chapter 13 bankruptcy

B

With all forms of bankruptcy, the debtor has an automatic stay, which provides immediate protection from any further action by creditors.

True

Your debt load is the amount of outstanding debt at a particular time.

True

With a rewards program, you can get money back for using your credit card.

True

Credit repair companies cannot remove accurate information from your credit report or change your credit score.

True

Debtors are required to receive credit counseling within six months before filing for Chapter 7 bankruptcy.

True

No interest is charged on the unused portion of a line of credit.

True

One purpose of bankruptcy law is to ensure fair treatment for creditors.

True

Penalty fees are not permitted to be higher than the minimum payment due.

True

The Fair Credit Billing Act requires credit card companies to have billing error policies and inform their customers how to report errors.

True

The balloon payment is often the first loan payment.

True

The minimum payment due and the payment due date must be disclosed on your monthly credit card statement.

True

The person who borrows money is called a debtor.

True

If you had a loan for $30,000 at an annual interest rate of 8 percent with a 90-day interest prepayment penalty, what would be the amount of your penalty? a. $200 b. $400 c. $600 d. $2,400

C

The process of dividing up your debt into equal payments over a set period of time is a. depreciation b. budgeting c. amortization d. refinancing

C

Visiting a doctor and paying later involves which of the following types of credit? a. revolving b. installment c. service d. charge card

C

Which of the following types of loans requires a large down payment? a. FHA loan b. VA loan c. conventional loan d. Rural Development loan

C

A buying plan should include all of the following except a. a spending limit b. criteria c. a timeline d. collateral

D

All of the following are required to be included in a credit card's disclosure terms except a. the annual percentage rate (APR) b. the minimum finance charge on unpaid balances c. cash advance fees d. an amortization schedule

D

Information related to a bankruptcy stays in your credit file for how long? a. 180 days b. 3 years c. 7 years d. 10 years

D

To qualify for student loan forgiveness, you must a. teach in an elementary or secondary school for at least five years b. have a part-time or full-time job in the field that you majored in c. have no other outstanding debt d. work full time in a public service job

D

Under which type of bankruptcy does the debtor follow a court-approved plan to pay back as much debt as possible over a three- to five-year period? a. none of these b. Chapter 11 bankruptcy c. Chapter 7 bankruptcy d. Chapter 13 bankruptcy

D

Which of the following is not a type of living habit? a. cleanliness b. sleeping late c. frequent socializing d. vehicle used for transportation

D

Which of the following is refundable to the tenant? a. cleaning fee b. Internet installation charge c. fee for changing the locks d. security deposit

D

Which of the following laws limits a person's liability to $50 after a credit card has been reported lost or stolen? a. Fair Credit Billing Act b. Credit CARD Act c. Fair Credit Reporting Act d. Truth in Lending Act

D

Usury laws limit the interest rate that lenders can charge.

True

A property manager lives on-site and provides or arranges for repair and maintenance work, collects the rent, and supervises the safety of all common areas.

False

Alternative dispute resolution (ADR) is less expensive than going to court, but ADR is a much slower process.

False

Bankruptcy stays on a person's credit record for up to 14 years.

False

Chapter 13 bankruptcy is intended for business owners.

False

Creditors can never raise the interest rate on a credit card account with a fixed rate.

False

During good economic times, interest rates are usually falling.

False

Each purchase you make involves two choices—what to buy and when to buy it.

False

Financial irresponsibility typically leads to bankruptcy.

False

Most credit counselors recommend accepting more credit than you need.

False

Most creditors use the adjusted balance method for computing interest.

False

Owning your own house gives you tax advantages, such as deductible property taxes and interest expense.

False

The purpose of a dispute letter is to notify a government agency that you wish to dispute an amount billed to your credit account.

False

Visa and MasterCard are examples of charge cards.

False

When a debtor files bankruptcy, he or she must give up all owned property.

False

When creating a buying plan, you should set a spending limit before choosing the item to buy.

False

While a billed amount is in dispute, you are not liable for the disputed amount or any other charges to your account.

False

When defining your spending goal, you should recognize your opportunity cost.

True

When you lease a car, you will usually not be responsible for major repair costs.

True

Being financially responsible means you are able to make payments as agreed and honor your financial commitments.

True

Consumers have the right to one free copy of their credit reports from each of the three major credit bureaus annually.

True

A car loan typically does not require a down payment from the buyer.

True

A collection agency can attempt to collect on a judgment against you by taking your assets, levying your bank account, or garnishing your wages.

True

A consumer has 60 days from the day a bill is received to file a dispute.

True

A person can be forced into involuntary bankruptcy if creditors petition the court to do so.

True

A rental agreement is also called a month-to-month agreement.

True

Bank and store credit cards are a type of revolving credit.

True