Bankruptcy

What is bankruptcy?

• Bankruptcy is a legal process where an individual or business declares that they are unable to pay their debts and seeks relief from their creditors.

• Bankruptcy is a process where an individual or business is punished for not paying their debts.

• Bankruptcy is a process where an individual or business is exempted from paying their debts.

• Bankruptcy is a process where an individual or business is rewarded for paying off their debts.

True or False: Bankruptcy can eliminate all types of debt.

• Sometimes

• False

• True

• Only for credit card debt

A financial "fresh start" for an individual might be found through which of the following?

• Filing Chapter 1

• Filing Chapter 7

• Filing Chapter 17

• Filing Chapter 21

The person who owes money to someone else is the

• debtor

• creditor

• lender

• bank

You have not been able to pay the bank the payments you owe on your truck. Eventually, the bank will

• Make you file bankruptcy

• Call your mom

• Garnish your truck

• Repossess your truck

If you are employed by someone else and the court says you own money, part of your paycheck may be withheld to pay your debt. This is called ___.

• Garnishment of wages

• Repossession of money owed

• Partial bankruptcy

• Very embarrassing to you

If you make a major purchase such as a car or boat, the item purchased will likely be held as ____ to protect the bank's loan to you.

• Ransom

• Collateral

• Collision insurance

• Prisoner

Garnishment cannot exceed this percent of your weekly take-home pay.

• 10%

• 15%

• 25%

• 50%

How does filing for bankruptcy affect an individual's credit score?

• It significantly improves the credit score immediately.

• It has no effect on the credit score.

• It may significantly lower the credit score for several years.

• It only affects the credit score if debts are not discharged.

What are the consequences of filing for bankruptcy?

• Retainment of assets

• Easy access to loans

• The consequences of filing for bankruptcy include a lower credit score, difficulty securing loans, loss of assets, and potential damage to reputation.

• Increased credit score