Bankruptcy Ch.8 & 9

Front

What is a lien?

Back

A lien is a legal right to keep possession of property belonging to another person until a debt owed by that person is discharged.

Front

What does repossession mean?

Back

Repossession is the act of taking collateral when a borrower fails to repay a loan.

Front

What is garnishment?

Back

Garnishment is a legal procedure requiring a portion of the debtor’s pay to be set aside by the person’s employer to pay creditors.

Front

What is debt?

Back

Debt is something that is owed that will decrease future earnings.

Front

How do you calculate owner’s capital?

Back

Owner’s capital equals total assets minus total liabilities.

Front

What is Chapter 7 Bankruptcy?

Back

Chapter 7 Bankruptcy is a type of bankruptcy that involves the liquidation of assets to pay off debts.

Front

What is Chapter 11 Bankruptcy?

Back

Chapter 11 Bankruptcy is a type of bankruptcy that allows businesses to reorganize and continue operating while repaying creditors.

Front

What is Chapter 13 Bankruptcy?

Back

Chapter 13 Bankruptcy is a type of bankruptcy that allows individuals to create a repayment plan to pay back all or part of their debts over time.

Front

What is collateral?

Back

Collateral is an asset that a borrower offers to a lender to secure a loan.

Front

What is the 20/10 Rule?

Back

The 20/10 Rule is a guideline suggesting that individuals should not borrow more than 20% of their annual income and should not have monthly debt payments exceeding 10% of their monthly income.