Bankruptcy Review

Multiple Choice

Debt can be avoided through which of these:

• Frivolous spending

• Budgeting Finances

• Investing in the Stock Market

• Employer Benefits

Multiple Choice

This type of Bankruptcy is primarily for businesses

• Chapter 7

• Chapter 11

• Chapter 12

• Chapter 13

Multiple Choice

This type of bankruptcy is also known as "straight" or "liquidation"

• Chapter 7

• Chapter 11

• Chapter 12

• Chapter 13

Multiple Choice

The person who owes money to someone else:

• Debtor

• Creditor

• Loser

• Owen

Multiple Choice

Which of these debts is not dischargeable:

• Car Loan

• Student Loan

• Credit Card

• Home Loan

Multiple Choice

If a person needs to restructure their debt to a repayment plan, they would use:

• Chapter 7

• Chapter 11

• Chapter 12

• Chapter 13

Multiple Choice

How long does a Chapter 7 (straight/liquidation) Bankruptcy stay on the credit report?

• 3 Years

• 7 Years

• 10 Years

• Forever

Multiple Choice

Liquidation means:

• Soak your debts

• Sell assets to pay off debt

• Pay off credit cards

• Take a shower

Multiple Choice

Which ONE of these will probably lead to Bankruptcy?

• Having student loans of $20,000 when your salary is $50,000

• Contacting the loan company to negotiate a lower interest rate

• Having car & home loans, multiple credit cards, eating at restaurants most nights, & frequent shopping that exceeds your monthly paycheck

• Taking a lower paying job because you like it a lot and there is a chance of promotion

Multiple Choice

Johnny wants to avoid filing for bankruptcy. Which option should he choose?

• Keep a log of assets and storing them away to preserve their value

• Maxing out credit cards to pay off her debts, such as car & home loans

• Making sure creditors are not aware of his finances, or else they might raise the interest rate

• Eliminate unnecessary expenses from his budget like eating out, getting rid of cable, finding a cheaper phone plan, & buying only necessities

Multiple Choice

All of these are potential consequences of bankruptcy EXCEPT:

• Bankruptcy is public record, so friends, family, employers and acquaintances could find out about your finance problems

• You may feel like a failure in life

• Bankruptcy remains on your credit report for 15-20 years

• You may be forced to liquidate your assets like your house, car and valuables to pay creditors

Multiple Choice

This Bankruptcy chapter allows you to repay debts within 3-5 Years

• Chapter 7

• Chapter 11

• Chapter 12

• Chapter 13

Multiple Choice

What is the purpose of Bankruptcy?

• To take everything a person owns to punish them for being financially irresponsible

• Allows a person/business to have a fresh start and a way to get out of debt

• Prevents a person from ever having debt again

• Ensures banks get all their money back

Multiple Choice

This type of Bankruptcy allows a person/business to discharge (eliminate) their debt by erasing it after liquidating assets

• Chapter 7

• Chapter 11

• Chapter 12

• Chapter 13

Multiple Choice

Which situation would a person file for Bankruptcy?

• They are totally unable to pay all of their debts

• They want to make lots of money in the future

• Paying their debts would make them live a lesser lifestyle

• They have no hope of ever having a job

Multiple Choice

Filing for bankruptcy should be your FIRST step if you are struggling to pay your bills

• True

• False

Multiple Choice

A court order imposed on an employer to withhold a portion of an employee’s pay to be sent to a person or business to whom the employee owes money.

• Wage Gernishment

• Wage Garnishment

• Wane Garnishment

• Wag Garnishment

Multiple Choice

A loan not backed with collateral.

• Petition

• Secured Debt

• Unsecured Funds

• Unsecured Debt

Multiple Choice

All required documentation that will begin a bankruptcy proceeding (e.g., bankruptcy forms, schedules, statements, plan) plus payment of the court filing fee

• Chapter 13

• Chapter 7

• Petition

• Budget

Multiple Choice

The legal process by which a property that is mortgaged as security for a loan may be sold and the proceeds of the sale applied to the mortgage debt

• Foreclosure

• Repossession

• Dischargeable Debt

• Nondischargeable Debt

Multiple Choice

The goal of bankruptcy—a court order that releases the debtor from paying debts (liabilities) owed

• Bankruptcy

• Means Test

• Discharge

• Petition

Multiple Choice

A person who provides legal representation of a debtor.

• Attorney

• Prosecutor

• Debtor Attorney

• Debtor Prosecutor

Fill in the Blank

Money owed in exchange for loans or for goods or services purchased with credit.

Multiple Choice

An independent person appointed to administer a bankruptcy case, collect assets, and pay creditors.

• Debtor Attorney

• Bankruptcy Trustee

• Creditor

• Debtor

Multiple Choice

legal proceedings discharging debts and distributing assets

• deed of trust

• insolvent

• mortgage

• bankruptcy

Multiple Choice

You should avoid filing bankruptcy at all cost.

• true

• false (That means the above statement is wrong.)

Multiple Choice

25% of people going into foreclosure do so because they developed a health issue.

• True
• False

Multiple Choice

You should avoid all calls and mail from your lender.

• True
• False

Multiple Choice

Explain the eligibility criteria for filing Chapter 7 bankruptcy.

• Being employed for at least 10 years

• Passing the means test, receiving credit counseling, and not having filed for Chapter 7 bankruptcy in the previous 8 years.

• Owning a car worth more than $5,000

• Having a credit score above 700