Unit 4 Vocabulary

A plan to limit the use of credit to no more than 20 percent of your yearly take-home pay, with payments of no more than 10 percent of monthly take-home pay.

• 20/10 Rule
• Credit Management
• Down Payment
• Credit Repair

A legal process that relieves debtors of the responsibility of paying their debts or protects them while they try to repay.

• Debt Settlement Program
• Debt Management Plan
• Debt Consolidation
• Bankruptcy

A reorganization form of bankruptcy for businesses that allows them to continue operating under court supervision as they repay their restructured debts.

• Chapter 13
• Chapter 7
• Chapter 11
• Bankruptcy

A reorganization form of bankruptcy for individuals that allows debtors to keep most of their property and use their income to pay a portion of their debts over three to five years.

• Chapter 13
• Chapter 7
• Chapter 11
• Bankruptcy

A liquidation form of bankruptcy for individuals that wipes out most debts in exchange for giving up most assets.

• Chapter 13
• Chapter 7
• Chapter 11
• Bankruptcy

A service to help consumers manage their debt load and credit more wisely.

• Credit Counseling
• Credit Management
• Exempted Property
• Credit Repair

Following an individual plan for using credit wisely.

• Credit Management
• Credit Counseling
• Reaffirmation
• Credit Repair

A record of your debts and a strategy for paying them off.

• Credit Management
• Credit Counseling
• Reaffirmation
• Credit Payment Plan

The process of reestablishing a good credit rating.

• Credit Management
• Credit Counseling
• Discharged Debts
• Credit Repair

A type of debt relief service in which a finance company loans you money to pay off your debt.

• Discharged Debts
• 20/10 Rule
• Debt Consolidation
• Involuntary Bankruptcy