Bankruptcy Test Review. True/False Bankruptcy stays on your credit report for 10 years and decreases your credit score.

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Presentation transcript:

Bankruptcy Test Review

True/False Bankruptcy stays on your credit report for 10 years and decreases your credit score.

TRUE

True/False People who file bankruptcy pay lower interest rates because they have no debts.

FALSE

OK/Not OK You should declare bankruptcy when it becomes difficult to make your monthly payments.

NOT OK

OK/NOT OK You should declare bankruptcy when your insurance company will not pay all of your medical bills.

NOT OK

OK/NOT OK You should declare bankruptcy when you have no other options.

OK

GOOD/BAD Getting consumer credit counseling is a good option to bankruptcy.

GOOD

GOOD/BAD Taking a home equity loan is a good option to bankruptcy.

GOOD, but risky

GOOD/BAD Taking out a debt consolidation loan is a good option to bankruptcy.

GOOD, but may be more expensive in the long run. You must stop spending.

GOOD/BAD It is better to stop payment on all bills rather than declare bankruptcy.

BAD

_____ is defined as being legally released from the obligations to repay some or all debt in exchange for giving up some of your assets.

Bankruptcy

True/False You do not have to give up anything when declaring bankruptcy.

False

True/False You can never repair your credit history after declaring bankruptcy.

False

What is a way to rebuild your credit history after declaring bankruptcy?

Use Credit Cautiously Pay Your Bills on Time

People who file bankruptcy can get credit but will pay ____ interest rates until they rebuild their credit history.

HIGHER

What type of bankruptcy that reorganizes your personal debt with a payment plan?

Chapter 13

One of the advantages of filing bankruptcy is that creditors are required to:

Stop calling your about late payments

What should you do if you are having problems paying your bills?

Get credit counseling to help resolve the problem and keep it from happening again

When declaring bankruptcy, what is considered a crime and has serious consequences?

Making False Statements

What are some of the major reasons for declaring bankruptcy?

Divorce Gambling Failing to Pay Personal Income Tax

What is not a major reason for declaring bankruptcy?

Student Loans