Credit Bingo Flashcards
Acceleration Clause
Requires a borrower to pay back a loan immediately under certain conditions
Fair Credit Billing Act
Protects people from unfair billing practices
Equal Credit Opportunity Act
Preventing creditors from discriminating anyone from using credit due to anything that has nothing to do with the loan
Fair Credit Reporting Act
Protects peoples financial information
Truth in Lending Act
Requires lenders to provide the customer with all fees, charges associated with the loan
Capacity
Debt to income ratio. Your ability to pay back debts. The lower your DTI is the lower of a risk you are to a lender
Credit Bureau
Credit report companies, collect and store your information for lenders.
Equifax, Experian, and TransUnion.
chapter 7 bankruptcy
A bankruptcy stays on your credit for up to 10 years. A chapter 7 bankruptcy terminates a business. Does not require a plan of repayment, instead, the bankruptcy trustee sells the debtor’s nonexempt assets. The debtor may exempt certain assets but the trustee would liquidate all remaining assets.
Chapter 11 bankruptcy
Reorganizing their debts which often means negotiating a payment plan with creditors and may include settling on a lower repayment. Usually, the debtor remains “in possession,” has the powers and duties of a trustee, may continue to operate its business, and may, with court approval, borrow new money.
Chapter 13 bankruptcy
Allows a debtor to keep property and pay debts over time, usually three to five years. There is no minimum amount of debt you must have to file chapter 13, but it cannot exceed 2,750,000. Any individual is eligible for chapter 13 relief, even if self-employed.
Insolvent
When an individual or company can no longer meet their financial obligations
