Bankruptcy

Bankruptcy is a legal process.

• True

• False

Being insolvent means:

• That you are flat broke

• That you have insufficient income and assets to pay your debts

• That you have plenty of assets but you are having a bad month

• That you cannot solve your problems, someone else neeeds to do it

Even though bankruptcy is essentially giving you a second chance, it does:

• Place a heavy burden on your creditors

• leave a long stain on your credit record

• create more divorces than being unfaithful to your spouse does

• not relieve you of the duty to pay off your debts

Secured debt

• is backed by a specific asset

• A loan not backed by collateral

With unsecured debt, typically the only way a creditor can collect is:

• Through a legal process (the courts)

• By taking the asset that backs the debt

• Send an enforcer to break your legs

• All of the answers are correct

Straight Bankruptcy is the same as ___________ Bankruptcy

• Chapter 11

• Chapter 13

• Chapter 7

Bankruptcy that involves reorganization for an individual is __________ Bankruptcy

• Chapter 7

• Chapter 11

• Chatper 13

Bed Bath and Beyond (Not Bath and Body Works) recently filed Bankruptcy. They would have filed _______________ Bankruptcy

• Chapter 11

• Chapter 7

• Chapter 13

Chapter 11 Bankruptcy is typically filed by:

• Individuals with large medical debt

• Individuals who want a fresh start

• Businesses that want to reorganize

• Individuals who are getting a divorce

If you assets are being liquidated, they are typically being:

• Sold to pay off your debts

• Put in storage until you can pay for them

• Protected from creditors

• All of the answers fit the definition of liquidation