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Personal Finance chapter 10

Terms in this set (46)

Exercising good _____ means following an individual plan for using credit wisely.
credit management
with _______, a finance company loans you money to pay off your debt
debt consolidation
_________ services will help you develop a personalized budget plan
credit counseling
If a person agrees to pay back a debt after it has been discharged by bankruptcy, the agreement is called ___.
reaffirmation
with ______ bankruptcy, the debtor works outs court-enforced repayment plan whereby he or she makes a single monthly payment
chapter 13
________, often called straight bankruptcy, allows some assets that are considered necessary for survival to be retained
chapter 7
________ includes assets that a debtor is allowed to keep after bankruptcy because they are considered necessary for survival
exempted property
________ occurs when a debtor files a petition with the court asking to be declared bankrupt
voluntary bankruptcy
__________ occurs when creditors file a petition with the court asking that a debtor be declared bankrupt
involuntary bankruptcy
__________ is a legal process that relieves debtors of the responsibility of paying their debts or protects them while they try to repay
bankruptcy
the _________ suggests that consumers limit the use of credit to no more than 20 percent of yearly take-home pay, with payments of no more than 10 percent of monthly take-home pay
20/10 rule
_______ refers to debt that does not have to be paid
discharge debt
a __________ is a cash advance from your next payroll check
payday loan
_________ is a form of bankruptcy for businesses that attempts to reorganize the debt structure rather than liquidate the business
chapter 11
_________ is the process of reestablishing a good credit rating
credit repair
credit problems often arise after months and years of poor planning
true
the 20/10 rule suggests that you limit the use of credit to no more than 20 percent of your yearly gross pay, with payments of no more than 10 percent of your monthly gross pay
false
a credit repair plan is a record of your debts and a strategy for repaying them off
false
credit counseling services are typically free
true
to qualify for a debt consolidation loan, you must have some type of collateral that secures the payment of the debt
true
when you declare bankruptcy, you are said to be insolvent
true
when you declare bankruptcy, all of your debts are erased and you get a fresh start without carrying forward previous obligations
false
discharged debts are debts that a person declaring bankruptcy no longer has to pay
true
chapter 7 is a liquidation form of bankruptcy that wipes out most debts in exchange for giving up most assets
true
the purpose of chapter 11 bankruptcy is to liquidate the company and pay off its creditors
false
involuntary bankruptcy is the most common kind of bankruptcy
false
in many cases, persons declaring bankruptcy must give up most of their property to be sold to pay debts
true
income taxes, child support, and alimony are examples of debts that are not discharged by bankruptcy
true
if you file for chapter 7 bankruptcy, any cosigners you have are no longer obligated to repay the loans they cosigned
false
it is a good idea to get legal advice when considering filing for bankruptcy
true
which of the following is commonly known as straight bankruptcy
chapter 7 bankruptcy
the 20/10 rule does not apply to
mortgage loans for housing
If you file for chapter 13 bankruptcy, the judgment remains on your credit record for _________ years
seven
when a debtor has reaffirmed a debt after bankruptcy judgment, he or she has ______ days to change his or her mind about promising to repay
60
to repair a poor credit rating, you can
challenge incorrect information
which of the following debts is not discharged by bankruptcy
student loans
the biggest cause of bankruptcy is
medical expenses
under _________, debtors may keep most of their property but must submit a payment plan to the court
reorganization
credit problems can arise from
emergencies
impulse buying
careless budgeting
when designing a credit payment plan, accounts with _____________ should be first priority
highest interest rate
to be insolvent means that you are
unable to pay your bills
which of the following is one of the goals of bankruptcy laws in the United States
to give fair treatment to creditors competing for debtors' assets
when a creditor asks the court to declare a debtor bankrupt, this action is known as
involuntary bankruptcy
which of the following is a debt that would be discharged by bankruptcy
loan payment
under _________, the court sells the debtor's assets and uses the proceeds to pay the debts
liquidation
which of the following forms of bankruptcy is used for business
chapter 11
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