WorksheetsResponsible Use of Credit & Bankruptcy (FL9&10)
Total questions: 35
Worksheet time: 18mins
If your bank sends you an email asking your to respond with your pin number for security reasons, it is always important and safe to email them back with your pin number as soon as possible.
True
False
Which is a responsibility that your creditor has to you?
Inform you about rules and regulations
Use reasonable means of contacting you
Set reasonable guidelines for credit use
All answers are correct.
Which is a responsibility that you have to your creditor?
Pay off the balance in full each month
Make payments on time
Shop around for the best deals
All answers are correct
Installment contracts must indicate the APR and finance charges.
True
False
A scam that uses online pop-up messages or email to deceive you into disclosing personal information
encryption
phishing
philtering
data breach
One way to minimize the cost of credit is to
open as many different credit cards as possible.
make more than minimum payments.
only use cash for purchases over $100.
All answers are correct.
Money paid for the use of someone else's money
principal
dividends
interest
collateral
When creditors apply the finance charge only to the amount owed after you've paid your bill each month, which billing method are they using?
previous balance
adjusted balance
average balance
simple balance
A legal process that allows part of your paycheck to be withheld for payment of a debt
garnishment
bankruptcy
debt adjustment
phishing
The amount borrowed on which the borrower pays interest
down payment
interest
finance charge
principal
A credit counseling office would provide which service?
Help you create a budget
Provide a debt consolidation plan
Provide a debt adjustment plan
All answers are correct.
In bankruptcy, most of a debtor's financial resources will be used to repay secured debt.
True
False
Which debt cannot be discharged through bankruptcy proceedings?
student loans
credit card debt
personal loan debt
All debts can be discharged through bankruptcy.
What can you do to safeguard your credit cards?
carry only the cards you need
check your monthly billing statement
destroy old cards
All answers are correct.
After a court declares you bankrupt, a creditor can still ask you to pay off the debt.
True
False
Your credit card debt was discharged through bankruptcy proceedings. The credit card company can still choose to sue you for the amount you owe in civil court.
True
False
You are in debt and have a low credit score. A credit repair company suggests a number of ways you can repair your credit score. Which option sounds like a scam?
see a credit counselor for a help with a budget
refinance your debt with a debt consolidation plan
apply for a new Social Security number to start a new credit report
call creditors and ask for an interest rate reduction
Which plan allows a finance company to take over your bank account to pay your bills for you for 3-5 years?
credit counseling plan
debt adjustment plan
debt consolidation plan
Which plan involved a finance company loaning you enough money to pay off all of your debt?
credit counseling plan
debt adjustment plan
debt consolidation plan
This occurs when creditors file a petition with the court asking the court to declare you bankrupt.
voluntary bankruptcy
involuntary bankruptcy
Which of the following is a reorganization form of bankruptcy for businesses?
Chapter 7
Chapter 9
Chapter 11
Chapter 13
Assets considered necessary for survival
exempted property
repossessed property
discharged property
liquid asset property
All credit cards calculate interest and finance charges using the same method.
True
False
Which type of loan will usually have a lower interest rate?
secured loans
unsecured loans
What is a reason why credit costs vary?
your credit score
the length of the loan
the source of credit
All answers are correct.
Which statement is true about variable or adjustable rate loans?
The interest rate remains the same for the lifetime of the loan.
The interest rate can go up or down at any point during the lifetime of the loan.
The interest rate starts low and will always increase during the lifetime of the loan.
The interest rate starts high and will always decrease during the lifetime of the loan.
How often are payments usually made on installment loans?
weekly
monthly
quarterly
yearly
You can be arrested if you have too much credit card debt and you haven't made any payments in over a year.
True
False
In most credit transactions, the standard practice for computing simple interest is to count how many days in each year?
350
355
360
365
The interest rate that the bank offers to its best commercial customers
business rate
discount rate
commercial rate
prime rate
Which credit card billing method is the most common today?
adjusted balance
previous balance
average balance
Which statement about a debt adjustment plan is true?
You must have a monthly income sufficient to pay off all debt in 3-5 years.
You must have a credit score below 550 to qualify.
You must have at least $20,000 in debt to qualify.
You must have collateral, such as a house, to qualify.
Which statement about a debt consolidation plan is true?
You must have a monthly income sufficient to pay off all debt in 3-5 years.
You must have a credit score below 550 to qualify.
You must have at least $20,000 in debt to qualify.
You must have collateral, such as a house, to qualify.
What is the goal of bankruptcy?
to give the debtor a fresh start
to give fair treatment to creditors
Both answers are correct.
Neither answer is correct.
Which rule helps you stay out of credit trouble by giving your reasonable limits for the amount of debt that you take on?
10/20 rule
10/10rule
20/10 rule
20/20 rule
