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WorksheetsChapter 9 Credit Management
Total questions: 23
Worksheet time: 19mins
Match the following
Something that is owed that will decrease future earnings.
Debt
Legal state in which the courts excuse a debtor from paying some or all debt.
bankruptcy
The fraudulent use of someone else’s credit information.
credit fraud
The amount of debt a consumer has at a given point in time.
debt load
Of the following, which is not a result of a credit problem?
lien
garnishment
foreclosure
zero balance
Which of the following is positive aspect of using credit?
opportunity to buy expensive items, and pay for them later
reduction of future spendable income
easy to overspend
can be expensive because of interest and fees
Which of the following solutions to credit problems should be done first?
declare bankruptcy
allow creditors to garnish wages
notify creditors of your situation
allow foreclosure
If you find yourself with a lot of debt, which of these is a RESPONSIBLE strategy for paying off your debts?
Pay only your secured debt so you don't lose your house or car, then worry about your unsecured debt later on
Pay your unsecured debt first, then worry about your secured debt later on because that debt is backed up by your house or car
Make the minimum payment on all debts, cut out all unnecessary spending from your budget, and put all the extra money toward paying down debt
File for bankruptcy so you can start anew with a clean slate
Match the following
Taking of collateral when a borrower fails to repay a loan.
repossession
Business that specializes in collecting past due debts.
collections agency
Forced sale of property.
foreclosure
Legal procedure requiring a portion of the debtor’s pay to be set aside by the person’s employer to pay creditors.
wage garnishment
Legal claim on a borrower’s property by a creditor who is owed money.
lien
There are different consequences for different types of debt.
Sort the following debts into the correct category.
medical debt
credit card debt
student loan debt
auto loan debt
mortgage debt
tax debt
A law that protects consumers against unfair methods of collecting debts.
Equal Credit Opportunity Act
Fair Credit Reporting Act
Fair Debt Collection Practices Act
Truth in Lending Act
The law that prohibits creditors from discrimination against an applicant on the basis of race, color, religion, origin, gender, martial status is called.....
Equal Credit Opportunity Act
Credit Card Accountability and Disclosure Act of 2009
Dodd-Frank Wall Street Reform and Consumer Protection Act
Electronic Funds Transfer Act
Which law requires creditors to tell consumers what credit will cost them before they use it?
Credit CARD Act
Truth in Lending Act
Fair Credit Reporting Act
Consumer Credit Report
What is the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 13 bankruptcy eliminates most types of debt. While Chapter 7 bankruptcy allows your to repay debts under the supervision of the court.
Chapter 7 bankruptcy eliminates most types of debt. While Chapter 13 bankruptcy allows your to repay debts under the supervision of the court.
What type of debt cannot be wiped out by declaring bankruptcy?
student loans
taxes
alimony and child support
all of the above
All are negative aspects of bankruptcy except?
it stays on your credit record for up to ten years
banks may repossess your belongings
most of your debt is excused
you may have trouble getting a car, house or new loan
The debt reduction method that you pay the highest interest loans off first while
making minimum payments on the others, this method save you the most money in interest.
Debt avalanche
Debt snowball
Debt snowflake
Debt snowman
The debt reduction method that you pay off the smallest loans first, which can be
motivating because you will have fewer sources of debt.
Debt avalanche
Debt snowball
Debt snowflake
Debt snowman
What consequences does a person experience if they have a low credit score?
high interest rates
pay more for same goods and services
unable to get loans
all of the above
How long does a Chapter 7 bankruptcy typically stay on your credit report?
5 years
7 years
10 years
15 years
A legal process that relieves debtors of the responsibility of paying their debts or protects them while they try to repay
Credit Utilization Rate
Credit
High Rate Method
Bankruptcy
What is a potential consequence of neglecting to pay your medical bills?
Jail
Loss of car
Wage garnishment
Debt sent to collections agency
Which is the LEAST DESIRABLE option to choose if you are struggling with debt and need help learning to manage your finances?
Seek advice from a Certified credit counselor
Use information from the Federal Trade Commission website
Making at least the minimum payment on all debts
Paying a Debt settlement company
If you stop making your debt payments, which of the following will happen?
Only credit card debts will show up on your credit report
Only bills sent to collection agencies will show up on your credit report
Only bankruptcy filings will show up on your credit report
All unpaid debts and bankruptcies will show up on your credit report which may lower your credit score
According to the Equal Credit Opportunity Act, which of the following factors CAN a lender legally use to charge you a higher interest rate.
Your age, if you’re under 21
Your credit score
Your marital status, if you are single
Based on where you are from
What can debt collectors do if you don't make payments towards your loans?
Have you arrested if you owe money
They can try contacting your boss at work
Reach out to your friends about the debt you owe
Call you between 8am-9pm to talk to you about your loans
