CONSEQUENCES OF BANKRUPTCY Influences financial freedom Limits choices Pay more for credit Other people absorb your debt
WRITE A RESPONSE You own a landscaping business. Over the past three months, 15% of your customers have missed payments and are filing for bankruptcy. What aspects of business does this affect and how does it affect pricing of your services?
Changes to Bankruptcy Law New law in effect October 17, 2005. New limits on personal bankruptcy. Requires those filing to get counseling before they are allowed to file. Bars filers with above-average income from filing Chapter 7 (liquidation). New debt may not be discharged. Quicker collections process
GUIDELINES Rent or Mortgage shouldn’t be more than 25%-28% of your monthly gross income Your rent plus other monthly debt payments should not exceed 36% of your gross monthly income Minimum, 3-6 months of emergency savings