chapter 10 personal finance
You should beware of any credit repair company that requires you to pay a fee before they act on your behalf. promises to remove negative information from your credit report. advises you to create a new credit identity. all of the above are true.
all of the above are true
is a legal process that relieves debtors of the responsibility of paying their debts or protects them while they try to repay.
bankruptcy
Which of the following is a reorganization form of bankruptcy for businesses? voluntary bankruptcy Chapter 13 bankruptcy involuntary bankruptcy Chapter 11 bankruptcy
chapter 11 bankruptcy
To qualify for a consolidation loan, you must have some type of____ that secures the payment of the debt.
collateral
Credit_____ is a service to help consumers manage their debt load and credit more wisely.
counseling
The process of reestablishing a good credit rating is called____
credit repair
With this type of program, a company negotiates with your creditors on your behalf to reduce the amount of debt you owe. debt counseling debt consolidation debt management debt settlement
debt settlement
___debts are debts erased by the court during bankruptcy proceedings.
discharged
Assets considered necessary for survival are called___ property.
exempted
Which of the following would NOT be considered a disadvantage of bankruptcy? some debts can be reaffirmed you may not qualify for liquidation cosigners must repay their loans exempted assets are retained
exempted assests are retained
A person planning to file for bankruptcy must receive credit counseling within two years before filing the petition. true or false
false
Chapter 13 bankruptcy is often referred to as straight bankruptcy. true or false
false
Credit problems usually happen quite suddenly. true or false
false
Debt settlement programs are typically free and can reduce your debt by as much as 90 percent. true or false
false
It is vital that you follow the 20/10 Rule when you take out a mortgage loan. true or false
false
The majority of funding for credit counseling organizations comes from the federal government. true or false
false
The use of gold and platinum credit cards almost always improves your credit rating, as it indicates that you have a high level of creditworthiness. true or false
false
Exercising good credit management means using credit for at least 80 percent of your purchases. never using credit under any circumstances. always getting someone to cosign your loans. following an individual plan for using credit wisely
following an individual plan for using credit wisely
A legal process where property used as collateral is sold to pay off a debt is called defaulting. garnishment. foreclosure. bankruptcy.
foreclosure
When you have insufficient income and assets to pay your debts, you are said to be liquidated. insolvent. unsecured. indigent.
insolvent
This occurs when creditors file a petition with a court asking the court to declare you bankrupt. foreclosure involuntary bankruptcy voluntary bankruptcy repossession
involuntary bankruptcy
Which of the following is the main advantage of Chapter 7 bankruptcy? it is better for the debtor in terms of reestablishing credit debtors get to keep most of their property it provides immediate debt relief it is the easiest form of bankruptcy to qualify for
it provides immediate debt relief
A(n) ____loan is a cash advance from your next payroll check.
payday
The agreement to pay debts that have been legally discharged is called
reaffirmation
With a debt ____program, a company you hire will call your creditors on your behalf and convince them to reduce the amounts you owe.
settlement
Commonly called _____ bankruptcy, Chapter 7 bankruptcy is a liquidation form of bankruptcy for individuals
straight
Bankruptcy will not affect certain types of income a debtor may have, such as Social Security or alimony payments. true or false
true
Creditors may ask debtors to agree to pay their debts, even after bankruptcy has discharged them. true or false
true
Generally, accounts with the highest interest rates should be your first priority in a credit payment plan. true or false
true
In bankruptcy, most of a debtor's assets will probably be used to repay unsecured debt. true or false
true
Information on credit scams, as well as credit advice, is available on the Federal Trade Commission (FTC) website. true or false
true
To qualify for a debt consolidation loan, you must have some type of collateral that secures the payment of the debt true or false
true
Voluntary bankruptcy, the most common type of bankruptcy, is initiated by the debtor. true or false
true
With a debt management plan, a consumer makes a single monthly payment to a credit counseling organization that distributes funds to creditors. true or false
true
All of the following are danger signs that you are overextending your credit except your credit cards are all near the limit. your credit score is rising. you often pay one credit card by using another credit card. you skip some payments in order to make other payments.
your credit score is rising