Debt & Bankruptcy

What is the best way to avoid financial troubles?

• Living within one's means and not taking on too much debt

• Using credit cards for all purchases

• Buying things one does not need

• Saving money for emergencies

Why is it important to keep good financial records?

• To track spending and identify areas to reduce expenditures

• To increase credit card limits

• To apply for new credit cards

• To avoid paying bills on time

What should be the top priorities in a monthly budget?

• Rent or mortgage, utilities, and food

• Entertainment, transportation, and education

• Snacks, movies, and other small purchases

• Credit card payments and new purchases

What are the consequences of unpaid debt?

• Liens, foreclosures, repossessions, and evictions

• Increased credit limits and better credit rating

• Lower interest rates and waived fees

• Annoying calls from collection agencies

What are some warning signs of serious credit trouble?

• Feeling overwhelmed by bills and paying bills late

• Reaching credit card limits and applying for new credit cards

• Using one credit card to pay off another

• All of the above

What can individuals do if they are unable to manage their debt on their own?

• Work with a debt counselor to create a payment plan

• Work with a debt settlement company to negotiate with creditors

• Both A and B

• None of the above

What is the purpose of consumer credit counseling?

• To develop a debt management plan to reduce and eliminate debt

• To charge fees for credit counseling services

• To take advantage of consumers

• To train counselors for credit card companies

What should individuals consider before choosing a consumer credit counseling organization?

• The services offered and the counselors' training and certification

• The cost and success rate of the organization

• The organization's privacy policies and how they resolve debt problems

• All of the above

What does a debt settlement company do?

• Works on an individual's behalf to reduce the amount of unsecured debt

• Works for credit card companies to collect debts

• Offers credit counseling services

• Files for bankruptcy on behalf of individuals

Why do credit card companies approve debt settlement arrangements?

• To receive at least some of their money

• To increase interest rates and fees

• To negatively impact borrowers' credit reports

• To avoid bankruptcy filings