Problems with Credit QUIZ

What is the 20/10 rule?

• Your total borrowing shouldn't exceed 20% of yearly take-home pay and you shouldn't take on monthly payments that total more than 10% of your total monthly pay

• Your total borrowing shouldn't exceed 10% of yearly take-home pay and you shouldn't take on monthly payments that total more than 20% of your total monthly pay

• You should borrow at least 20% more than your yearly pay and use 10% percent of the credit to buy your things

• Your total borrowing should exceed 20% of yearly take-home pay and you should take on monthly payments that total more than 10% of your total monthly pay

What is a debtor?

• A person that people owe money

• A person that owes other people money

• A person that puts people in debt

• A person helps people with debt

Bankruptcy is...

• A legal process that takes away the responsibility of paying their debts off or protects them while they attempt to repay.

• A legal process that gets rid of debtors debt

• A legal process that gives debtors the ability get rid of their debts and the responsibility of paying them

• A legal process that banks can use to give people money

An unsecured debt is a loan that?

• Is not safe to take out

• Is not backed by pledged assets

• Isn't secured by the government

• Does not need a background check

What is Involuntary bankruptcy?

• When you are forced to go bankrupt

• When creditors file a petition with the court asking to make you bankrupt

• When creditors make you apply for bankruptcy

• When creditors file a petition with other creditors asking to make you bankrupt

What is Voluntary Bankruptcy

• When you file a petition with a federal court asking to be declared bankrupt

• When you file a petition with a court asking to be declared bankrupt

• When you make a claim to a bank to apply for bankruptcy

• When you willingly run out of money.

True or False?

Discharged debts are debts erased by the court during bankruptcy proceedings

• True

• False

What is Chapter 11 bankruptcy

• A reorganization form of bankruptcy for businesses that allows them to continue operating under court supervision as they repay their restructured debts.

• A reorganization form of bankruptcy for businesses that does not allow them to continue operating under court supervision as they repay their restructured debts.

• A reorganization form of bankruptcy for debtors that allows them to continue operating under court supervision as they repay their restructured debts.

• A reorganization form of bankruptcy for debtors that does not allow them to continue operating under court supervision as they repay their restructured debts.

Chapter 7 bankruptcy...

(Select all that apply)

• Is a liquidation form of bankruptcy

• Is a chapter in a book

• Wipes out most assets in exchange for giving up most debts

• Wipes out most debts in exchange for giving up most assets

True or False?

Exempted property is the possessions that the bankrupt debtor is not allowed to keep because they are considered unnecessary for survival.

• False

• True