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Financial Management > Chapter 6 > Flashcards

Chapter 6 Flashcards

0
Q

A legal process to get out of debt when you have failed financially (when you can no longer make all your required payments). The case is filed under one of the chapters of Title 11 of the United States Code (the Bankruptcy Code).

A

Bankruptcy

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1
Q

An agency which collects the credit history of consumers so that creditors can make decisions about granting loans (TransUnion, Experian, and Equifax)

A

Credit Bureau

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2
Q

A report showing your payment history.

A

Credit Report

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3
Q

A chapter of the Bankruptcy Code that provides for liquidation (sell for cash) of the debtor’s assets in order to repay the creditors. Certain assets or aggregate value of assets of the debtor may be exempt (they don’t have to sell) based on state law.

A

Chapter 7 Bankruptcy

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4
Q

The amount of money left over from your paycheck after all necessities, taxes, and expenses are paid.

A

Disposable Income

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5
Q

Forbids collectors to deceive, abuse, or harass when collecting debts from people, protects you from unfair collectors. (passed in 1977)

A

Federal Fair Debt Collection Practices Act

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6
Q

Requires a credit bureau to remove all inaccuracies within 30 days of notifications of such inaccuracies.

A

Federal Fair Credit Reporting Act

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7
Q

A seller’s intentional deception (causes someone to believe something that isn’t true) of a buyer, which is illegal.

A

Fraud

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8
Q

Debt repayment plan by which the borrower repays each lender a fair percentage of the total debt owed when one cannot make the minimum payments on one’s debt.

A

Pro Rata

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9
Q

Pro Rata Gives

A

creditors a “fair share”

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10
Q

“I love debt” score

A

FICO Score

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11
Q

Using another person’s information to obtain goods or services.

A

Identity Theft

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12
Q

Court order allowing a lender to take money directly from the debtor’s paycheck

A

Garnishment

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13
Q

Trained salespeople to telemarketers

A

Collectors

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14
Q

Food, shelter, clothing, transportation

A

Four Walls

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15
Q

Fastest growing group of people filing for bankruptcy are ________

A

under 25

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16
Q

You should check your credit score every ___________

A

Year

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17
Q

The best way to deal with debt is with a plan (True or false)

A

True

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18
Q

Account information is removed from your credit card “______ years” after the last activity

A

7 years

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19
Q

May be legally removed from a credit report

A

Inaccurate information

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20
Q

Identity theft is the fastest-growing “________” crime in North America today.

A

White Collar

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21
Q

Place a fraud victim alert on your credit bureau report (stays on for 90 days without a police report)

A

Identity Theft: Step One

22
Q

Get a police report

A

Identity Theft: Step Two

23
Q

This is a theft. You owe nothing and should pay nothing.

A

Identity Theft: Step Three

24
Q

Contact the fraud victim division of each creditor and furnish documentation.

A

Identity Theft: Step Four

25
Q

Be persistent, this will take some time. Now you have a new hobby.

A

Identity Theft: Step Five

26
Q

______% of identities are stolen by people you know.

A

80%

27
Q

Collectors are taught in training to evoke strong ________

A

Emotion

28
Q

ALWAYS pay _______ first

A

Necessities

29
Q

(True or False)

The Federal Fair Debt Collection Practices Act sets up restrictions that creditors must follow.

A

True

30
Q

Gives creditors a “fair share”

A

Pro Rata

31
Q

“I love debt” score

A

FICO score

32
Q

Using another person’s information to obtain goods or services

A

Identify theft

33
Q

TransUnion

A

Credit bureau

34
Q

Court order allowing a lender to take money directly from the debtors paycheck

A

Garnishment

35
Q

Trained salespeople or telemarketers

A

Collectors

36
Q

Food, shelter, clothing, transportation

A

Four Walls

37
Q

True or False:

You should always pay the collectors first

A

False, you should always pay necessities first

38
Q

True or False:

The best way to deal with debt is with a plan.

A

True

39
Q

True or False:

The Federal Fair Debt Collection Practices Act allows creditors to call between 7 a.m. and 10 p.m.

A

False, the FFDCPA allows creditors to call between 8 a.m. and 9 p.m. your time.

40
Q

True or False:

If you are a victim of identity theft, you are only responsible for the first $250 of debt.

A

False, if you are a victim of identity theft, you are not responsible for any of the the debt.

41
Q

True or False:

You should check you credit report every year.

A

True

42
Q

Passed in 1977 to protect you from unfair collectors:

A

FFDCPA

43
Q

Which of the following I one of the Four Walls:

A

Mortgage payment

44
Q

It is a good idea to check your credit report:

A

Every year

45
Q

Which of the following tactics are collectors likely to use?

A

Lying, harassment & being friendly

46
Q

Which piece of information, if stolen, is not likely to lead to identity theft?

A

Phone number

47
Q

The pro rata payment includes which of the following elements:

A

Repayment of debt as soon as possible, using the Four Walls to set priorities, and giving a percentage of debt to each creditor.

48
Q

The fastest growing group of people filing for bankruptcy are

A

Under 25

49
Q

What is the best way to deal with collectors?

A

Have a plan

50
Q

Explain the steps to take if you fine an error on your credit report

A
  1. Write a separate letter for each inaccuracy
  2. Staple a copy or your credit report to each letter
  3. Circle the account number
51
Q

List some precautions to take to help safeguard against identity theft.

A

Shred documents
Don’t carry around you Social Security Card
Don’t give passwords
Don’t buy things online at an unsafe place

52
Q

Describe some common tactics used by collectors. Why do these you use these?

A

Lie, intimidate, attack, fake names, call relatives, attack emotions

53
Q

Refute the myth, “I need to build my credit score.”

A

Credit score is “I love debt score”

Financial Management (10 decks)

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