Daily Information 6/2 Objectives: 1.Describe the different types of bankruptcy. 2.Identify ways to protect yourself from credit card fraud. Warm Up: What are the warning signs that debt has become a problem? Agenda: 1.Warm up 2.Ch9 Vocab. 3.Bankruptcy P.P. 4.Make-up work 5.Credit problems activity

Today’s Assignments Answer the warm up question Complete vocabulary for chapter 9 Take notes on the PowerPoint for chapter 9 (Bankruptcy) Make-up work Credit Problems handout Turn all of these assignments into the substitute.

Prevent Credit Card Fraud Carry only the cards you need Verify all purchases Close inactive accounts Keep a list of credit cards and phone #’s Do not loan your credit card to others Use only secure websites to buy online Monitor your credit activity online Do not give your information over the phone or !**Pick the most and least important in your opinion – explain why

Credit Scams Credit repair scams: when someone offers to “fix” your credit rating Identity theft: when someone uses your personal information to commit fraud or other crimes. What should I do if my identity has been stolen? Close credit and bank accounts, place a fraud alert on your credit report, file a complaint with FTC and local police.

What Problems Arise from Debt? Collection agencies (unlawful to call you at work) Judgment/Garnishment (paycheck withheld) Repossession and foreclosure

What is Bankruptcy? Bankruptcy: a legal procedure to relieve a person of excessive debt It can be voluntary or involuntary It gives debtors a fresh start It helps ensure fair treatment for creditors It should be a last resort because it damages your credit rating *Stays on your credit report for up to 10 years

Avoiding Bankruptcy Credit counseling o Sets up a budget and arranges a payment plan Debt management o Creates a plan to pay off debt o Debtor must turn over checking account and give up credit cards Debt consolidation o Process of getting one loan to pay off all debts * You are required to receive credit counseling within six months of filing for bankruptcy.

Types of Bankruptcy Chapter 7 o Also called straight or liquidation bankruptcy o Involves the forfeiture of assets in exchange for discharge of debts o Allows for exemptions, or property that a debtor does not have to forfeit, such as tools of trade Assets sold to repay debt, remaining debts are discharged. Open textbook to page 292: What can and can not be discharged? Add this to your notes.

Types of Bankruptcy Chapter 11 (Businesses) o Also called a reorganization o Reorganization of debt as decided by the court. o Allows a business to remain viable Chapter 13 o Also called individual debt adjustment o Involves a 3- to 5-year court approved repayment plan for some of the debt o Good source of steady income (no interest or late fees) o If you don’t qualify for Chapter 7, this may be an option

Critical Information Review Answer these questions in your notes: 1.What are the different types of bankruptcy? 2.Identify ways you can protect yourself from credit card fraud.

Credit Problems Activity Read each scenario in the handout and provide advice for each person based on what you just learned about credit counseling and bankruptcy.