Debt Test Review

Debt can be avoided through which of these:

• Frivolous spending

• Budgeting Finances

• Investing in the Stock Market

• Employer Benefits

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

• Chapter 7

• Chapter 11

• Chapter 12

• Chapter 13

The person who owes money to someone else:

• Debtor

• Creditor

• Loser

• Owen

Which of these debts is not dischargeable:

• Car Loan

• Student Loan

• Credit Card

• Home Loan

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

• Chapter 7

• Chapter 11

• Chapter 12

• Chapter 13

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

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

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

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

• Chapter 7

• Chapter 11

• Chapter 12

• Chapter 13

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