1. Bankruptcy

2. Importance of Numbers

3. What do you know about bankruptcy?

5. Bankruptcy A legal process to get out of debt when you can no longer make all of your required payment.

8. Reasons for Bankruptcy

9. Medical Expenses

10. Job Loss

11. Business Losses

12. Natural Disaster

13. Credit Card Debt

14. DEBT The entire amount of money a person owes to lenders. Write a 1 paragraph response to this picture

15. Inflation An increase in the price of goods and services. A dollar in the future won’t buy as much as a dollar today.

28. BANKRUPTCY BASICS Chapter 7 LIQUIDATION wipes out all allowable debts and allows certain personal property exemptions. Chapter 13 REORGANIZATON is a court-approved repayment plan.

30. CONSEQUENCES OF BANKRUPTCY Influences financial freedom Limits choices Pay more for credit Other people absorb your debt

31. 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?

32. 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

33. ALTERNATIVES TO BANKRUPTCY

34. OUT OF COURT SETTLEMENT

35. REDUCTION OF PAYMENTS

36. ATTAINING HELP FROM CONSUMER CREDIT COUNSELING

37. PAYMENT OF DEBTS BY SELLING OR BORROWING ON PROPERTY

38. WHY WOULD SOMEONE DECLARE BANKRUPTCY? ARE THERE LEGITIMATE REASONS TO DECLARE BANKRUPTCY?

39. REMEMBER THERE ARE LEGITIMATE REASONS TO DECLARE BANKRUPTCY, BUT IT SHOULD ALWAYS BE A LAST RESORT.

40. THINGS TO CONSIDER BEFORE FILING

41. A Bankruptcy Filing Could Determine Whether Or Not You Get A Job

42. Your Insurance Rates Could Rise

43. You may find it difficult to rent an apartment or qualify for a home loan

44. Bankruptcies stay on your credit report for 10 years

45. Bankruptcy can lower your credit score

46. Things to Do BEFORE Filing

47. REDUCE YOUR SPENDING

48. TALK WITH YOUR CREDITORS

49. TALK WITH A NONPROFIT COUNSELING AGENCY

50. TALK WITH AN ATTORNEY AND UNDERSTAND THE CONSEQUENCES OF DECLARING BANKRUPTCY

51. CONSIDER CONSOLIDATION CAREFULLY

52. TIPS TO REMEMBER

53. KEEP TRACK OF YOUR DAILY EXPENSES

54. SAVE MONEY ON A REGULAR BASIS

55. MAKE CHANGES RIGHT AWAY IF YOU SEE YOURSELF STARTING TO GET INTO FINANCIAL TROUBLE

56. PAY ATTENTION TO YOUR HOUSEHOLD FINANCES, ESPECIALLY IF YOU ARE MARRIED

57. The United States Courts website offers several videos on the bankruptcy process. Click on the screen to go to their site.

59. Are Julee and Jimmy in Trouble?

60. 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