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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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.