Personal Finance Chapter 7

How long can a Chapter 13 bankruptcy repayment plan be?

5 years

Even cash advances on your credit card may cost less than this type of loan:

Tax refund loan

What are your 2 choices in declaring personal bankruptcy?

1) Chapter 7 2) Chapter 13

For which one of the student loans is the lender the U.S. Department of Education?

1) Direct Plus Loan 2) Diredt Stafford Loan

List the frequent reasons for indebtedness

1) Emotional problems 2) The use of money to punish 3) The expectation of instant comfort 4) Keeping up with the Joneses 5) Overindulgence of children 6) Misunderstanding /lack of communication among family members 7) The amount of finance charges can push a family over the edge

For which student loan must you not have a negative credit history?

1) FFEL Plus loans 2) Direct Plus loans

For which one of the student loans is the lender the bank?

1) FFEL Stafford Loans 2) FFEL Plus Loans

List the consequences of debt

1) Paying only the minimum monthly cc balance 2) Increasing the total balance due on credit accounts each month 3) Missing payments, paying late, paying some bills this month, others next month 4) Taking frequent cash advances/intentionally using overdraft/ automatic loans 5) Using savings to pay routine bills 6) Receiving 2nd or 3rd payment creditor notices 7) Not talking or only talking to your spouse re: money 8) Depending on overtime /bonuses to meet everyday expenses 9) Using up your savings 10) Borrowing money to pay debts 11) Not knowing how much you owe until the bills arrive 12) Going over your credit limit on credit cards 13) Having little or nothing in savings to handle uexpected expenses 14) Being denied credit because of a negative credit bureau report 15) Getting a credit card revoked 16) Postponing medical/dental visits because you can't afford them

With Chapter 7, what debts are protected from being sold off to creditors?

1) Social Security payments 2) Unemployment Compensation 3) limited values of your equity in a home, car, or truck 4) household goods and appliances 5) trade tools 6) books

You should avoid credit in 2 situations. What are they?

1) When you can't afford to pay cash 2) When you don't need or really want a product that will require fianancing

Although Chapter 7 discharges many debts, what debts are, or may, be excluded from discharge?

1) alimony 2) child support 3) certain taxes 4) fines 5) educational loan debt 6) loans obtained falsely 7) debts arising from fraud/embezzlement/driving while intoxicated/larceny

List the reasons consumers are unable to pay their bills on time

1) excessive use of credit 2) Unemployment/reduced income 3) Poor money management 4) Divorce/separation 5) Medical Expenses

Which group does the Fair Debt Collection Practices Act apply to? Agencies that collect debts for creditors or creditors that collect debts themselves?

Agencies that collect debts for creditors

The type of bankruptcy in which many, but not all, debts are forgiven; most of the debtor's assets are sold off to pay creditors but some assets are protected and some creditors still try to collect is:

Chapter 7

True or False. The term "bankrupt" is used in a Chapter 7 bankruptcy?

False

True or False. It is much less expensive to take out a cash advance than to charge a purchase to your credit card.

False. It is much more expensive

True or False. Chapter 7 bankruptcy is bankruptcy in which all debts are forgiven

False. Many, but not all, debts are forgiven in Chapter 7 bankruptcy

True or False. Most credit cards have a grace period on cash advances.

False. Most credit cards do not have a grace period on cash advances

True or False. The Tax Reform Act of 1986 allows you to deduct interest paid on consumer loans and consumer credit.

False. You can no longer deduct interest paid on consumer loans

For which one of the student loans is the lender the school?

Federal Perkins Loans

Who often lends to people who can't obtain credit from banks or credit unions?

Finance companies

What happens when you take a payment holiday on credit cards?

You still owe finance charges on your unpaid balance