Bankruptcy and Credit Management Quiz

What is a primary benefit of declaring bankruptcy?

• Increased credit score

• Debt relief and a fresh start

• More assets to sell

• Lower interest rates

Which of the following is an example of a personal loan?

• Loan to buy a car

• Loan to pay for college tuition

• Loan to consolidate credit card debt

• Loan to refinance a home

Which of the following is the most effective way to avoid accumulating credit card debt?

• Pay only the minimum payment each month

• Use credit cards for non-essential purchases

• Create a monthly budget and stick to it

• Apply for multiple credit cards at once

What is one potential downside of declaring bankruptcy?

• You are guaranteed to improve your credit score

• Bankruptcy becomes a public record and can affect your financial reputation

• You automatically receive a new loan

• You can keep all of your assets

What happens when you only make the minimum payment on a credit card?

• You’ll pay off the debt quickly

• You save money on interest

• Your debt could grow over time due to high interest

• Your credit score improves instantly