Bankruptcy Test Review

True/FalseBankruptcy stays on your credit

report for 10 years and decreases your credit score.

TRUE

True/FalsePeople who file bankruptcy pay

lower interest rates because they have no debts.

FALSE

OK/Not OKYou should declare bankruptcy

when it becomes difficult to make your monthly payments.

NOT OK

OK/NOT OKYou should declare bankruptcy when your insurance company will not pay all of your medical

bills.

NOT OK

OK/NOT OKYou should declare bankruptcy

when you have no other options.

OK

GOOD/BADGetting consumer credit

counseling is a good option to bankruptcy.

GOOD

GOOD/BADTaking a home equity loan is a

good option to bankruptcy.

GOOD, but risky

GOOD/BADTaking out a debt consolidation

loan is a good option to bankruptcy.

GOOD, but may be more expensive in the long run.You must stop spending.

GOOD/BADIt is better to stop payment on all

bills rather than declare bankruptcy.

BAD

_____ is defined as being legally released from the obligations to

repay some or all debt in exchange for giving up some of

your assets.

Bankruptcy

True/FalseYou do not have to give up anything when declaring

bankruptcy.

False

True/FalseYou can never repair your credit

history after declaring bankruptcy.

False

What is a way to rebuild your credit history after declaring

bankruptcy?

Use Credit CautiouslyPay Your Bills on Time

People who file bankruptcy can get credit but will pay ____

interest rates until they rebuild their credit history.

HIGHER

What type of bankruptcy that reorganizes your personal debt

with a payment plan?

Chapter 13

One of the advantages of filing bankruptcy is that creditors are

required to:

Stop calling your about late payments

What should you do if you are having problems paying your

bills?

Get credit counseling to help resolve the problem and keep it

from happening again

When declaring bankruptcy, what is considered a crime and

has serious consequences?

Making False Statements

What are some of the major reasons for declaring

bankruptcy?

DivorceGambling

Failing to Pay Personal Income Tax

What is not a major reason for declaring bankruptcy?

Student Loans