General Principles Chapter 10 Flashcards
Biz Law/Consumer Protection Laws
Contract Definition
enforceable agreements between 2 or more parties
offger, agreement, acceptance
Void contract
was never valid
Voidable contract
one party has the option of voiding
i.e. a contract is made with a minor or inebriated person or ill person: incompetent party may void the contract, not the other party
Agent
legal representative of insurance company
express, implied, sometimes apparent authority
Broker
marketing intermediary, represents policy owner
Express Authority
written, explicit direction
Implied Authority
public believes individual based on indicators that one has authority
Apparent Authority
agent appears to have authority because of past actions
Conditional Receipt
provide coverage as long as premium accompanies an acceptable (would be IGO) application
Fiduciaries
entity or person holding assets in trust for a bene. charge with responsibly investing for the bene
Fiduciary Examples
CFPs, executors, receivers in bankruptcy, trustees, people who adnminister assets to incompetent people, financial planners, physicians
Prudent Person Rule
act as a prudent individual, cfps to act like a prudent expert.
seek reasonable income, preserve assets, avoid speculative investments
Ch 11 Bankruptcy
for people who do not qualify for 13 bc
they exceed debt limitations
do not have regular sources of income
Ch 13 Bankruptcy
reorganization: payments to creditors are reduced, creditors cannot harass them. no relinquishing assets
Chapter 7
debtor claims federal or state exemptions
-homstead
-some personal property
- HOH wages (more than 1/2 support)
-some equity in motor vehicle
- pension & retirement plans
- cash value of LI or annuity contract proceeds
- disability, workers comp, unemployment
TE property
Debts not Cancellable
student/govt loans
recent income taxes due
child support
alimony
Chapter 7 Means Test
monthly net income for 60 months > 10,000: not an option
<$6000: yes option
if between 6-10, can file if net monthly income is <25% of nonpriority unsecured debts
proof of consumer credit councelling
info on ret accts and earnings projections
Roth + Traditional IRA Bankruptcy Exemption
$1mm
Rollover IRA Bankruptcy Exemption
unlimited unless the income exceeds debtors needs
Fair Credit Reporting Act
entitled to 1 free report a year (can request at any time for a nominal fee)
only interested parties may access
if denied credit, they can access their file
Consumer Credit Protection Act/Truth In Lending
interest must be reported as annual percentage rate
credit terms must be disclosed
lost or stolen cards: limited liability of 50 per card
Education Savings & 529 Plans in Bankruptcy
anything older than 2 years is exempt
