Questions and Answers
What is the legal procedure for dealing with debt problems of individuals and businesses?
What does a credit bureau do?
Collects the credit history of consumers.
What does a credit report show?
Credit history.
What does Chapter 7 bankruptcy provide for?
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What is disposable income?
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What does the FFDCPA stand for?
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What is the focus of the FFCRA?
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Fraud is an intentional deception by a seller.
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What is garnishment?
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What are necessities?
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What is meant by pro rata?
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Study Notes
Bankruptcy
- Legal procedure for addressing debt issues for individuals and businesses.
- Involves filing a case under Title 11 of the United States Code.
- Includes different chapters: Chapter 7, Chapter 11, and Chapter 13.
Credit Bureau
- Agency that collects and maintains consumer credit histories.
- Provides information that helps creditors make lending decisions.
Credit Report
- Document outlining a consumer's credit history and creditworthiness.
Chapter 7 Bankruptcy
- Focuses on the liquidation of debtor's assets to repay creditors.
- Certain assets may be exempt from liquidation, depending on state law.
Disposable Income
- Income remaining after all essential expenses are paid.
- Important for assessing financial stability and budgeting.
FFDCPA (Federal Fair Debt Collections Practices Act)
- Enacted in 1977 to protect consumers from abusive debt collection practices.
- Primarily applies to collection agencies, but recent rulings extend protections to creditors.
FFCRA (Federal Fair Credit Reporting Act)
- Mandates credit bureaus to report all inaccuracies found in consumer credit information.
- Aims to ensure fairness and accuracy in credit reporting.
Fraud
- Defined as the intentional deception of a buyer by a seller.
- Considered an illegal act that undermines trust in transactions.
Garnishment
- A legal order allowing a lender to deduct money directly from a borrower's paycheck.
- Can only occur as part of a court judgment.
Necessities
- Basic items required for survival, including food, water, shelter, and clothing.
- Essential for understanding budgeting and financial planning.
Pro Rata
- Debt repayment strategy where borrowers pay each lender a fair percentage of total debt owed.
- Implemented when borrowers cannot meet minimum payment requirements.
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Description
Explore key terms related to bankruptcy and credit bureaus in this quiz. Each card provides definitions that clarify these crucial financial concepts. Perfect for students studying finance or business law.
