Solving Credit Problems: Strategies and Bankruptcy Laws

1. Chapter 19 Problems with Credit

2. Solving Credit Problems • Credit problems usually arise after months and years of poor planning. • Easier to start off using credit wisely than to get out of trouble later. • 20/10 Rule –

3. Steps to Get Help • Credit Counseling • Debt Adjustment

4. Steps to Get Help • Credit Repair • Legal Recourse • debtor - • bankruptcy –

5. Bankruptcy Laws • 2 Goals of Bankruptcy Laws • 1) • 2) • Bankruptcy Act of 1898 • Bankruptcy Reform Act of 1994

6. Classes of Debt • Secured loans – • Unsecured debt –

7. Bankruptcy Vocab • Involuntary bankruptcy – • Voluntary bankruptcy –

8. Credit Vocab • Discharged debt – • Liquidation – • Reorganization –

9. Bankruptcy Vocab • Chapter 11 – • Chapter 7 – • Chapter 13 –

10. Bankruptcy Vocab • Exempted property – • $15,000 equity in a home or burial plot • $2,400 interest in motor vehicles • Items worth up to $400 for a single item for household goods and furnishings, appliances, clothing, personal items, for up to $8,000

11. Debts that cannot be discharged

12. Reaffirmation of Debts • Reaffirmation – • May choose reaffirmation if you had a ___________ • May choose if you don’t want to lose __________

13. Causes of Bankruptcy

14. Advantages of Bankruptcy

15. Disadvantages of Bankruptcy