Topic 4

Question 1

What are the different types of credit

Answer 1

open account credit

loan

Question 2

What are the ways to be discharged from bankruptcy?

Answer 2

annulment of bankruptcy order
discharge by court
discharge by cert of official assignee

Question 3

What are the bankruptcy schemes?

Answer 3

debt repayment scheme

repayment assistance scheme

Question 4

What are the general principles of sound credit management? do

Answer 4

Work out if it is necessary to borrow
Work out a debt-servicing level you are comfortable with
pay prompty all loan instalments
shop around for the cheapest loans
study details in the loan agreement before signing it

Question 5

What are the general principles of sound credit management? don’ts

Answer 5

borrow to cover daily living expenses
borrow for impulsive purchases
borrow to repay other loans
borrow so much you cannot service the interest payments
borrow so much you have to start avoiding your lenders

Question 6

What are examples of open account credit

Answer 6

bank overdraft
charge cards
credit cards

Question 7

What are example of loans

Answer 7

personal loans
education loan
car loan
housing loan

Question 8

How are loans categorised?

Answer 8

short vs long term
secured unsecured
variable vs fixed rate