Bankruptcy
Presentation
•
Financial Education
•
12th Grade
•
Medium
Wilbur Winborne
Used 4+ times
FREE Resource
14 Slides • 21 Questions
1
Bankruptcy
2
Multiple Choice
Which famous business person utilized bankruptcy laws?
President Trump
George Foreman
All of the above
Walt Disney
3
Multiple Choice
What is bankruptcy?
Bankruptcy is a legal process where an individual or business declares that they are unable to pay their debts and seeks relief from their creditors.
Bankruptcy is a process where an individual or business is punished for not paying their debts.
Bankruptcy is a process where an individual or business is exempted from paying their debts.
Bankruptcy is a process where an individual or business is rewarded for paying off their debts.
4
Bankruptcy
○ A legal process to get out of debt when
you can no longer make all your required
payment.
5
Multiple Choice
A financial "fresh start" for an individual might be found through which of the following?
Filing Chapter 1
Filing Chapter 7
Filing Chapter 17
Filing Chapter 21
6
Multiple Choice
The person who owes money to someone else is the
debtor
creditor
lender
bank
7
Multiple Choice
You have not been able to pay the bank the payments you owe on your truck. Eventually, the bank will
Make you file bankruptcy
Call your mom
Garnish your truck
Repossess your truck
8
Multiple Choice
If you are employed by someone else and the court says you own money, part of your paycheck may be withheld to pay your debt. This is called ___.
Garnishment of wages
Repossession of money owed
Partial bankruptcy
Very embarrassing to you
9
Multiple Choice
If you make a major purchase such as a car or boat, the item purchased will likely be held as ____ to protect the bank's loan to you.
Ransom
Collateral
Collision insurance
Prisoner
10
Multiple Choice
How does filing for bankruptcy affect an individual's credit score?
It significantly improves the credit score immediately.
It has no effect on the credit score.
It may significantly lower the credit score for several years.
It only affects the credit score if debts are not discharged.
11
Multiple Choice
What are the consequences of filing for bankruptcy?
Retainment of assets
Easy access to loans
The consequences of filing for bankruptcy include a lower credit score, difficulty securing loans, loss of assets, and potential damage to reputation.
Increased credit score
12
Multiple Choice
13
Multiple Choice
A social consequence to filing for bankruptcy
Not receiving a job offer
Not qualifing for a loan
Not qualifing for insurance
Having an unfavorable reputition in the community
14
Multiple Choice
Which agency is responsible for ensuring there is a healthy econmy in the United States
Federal Reserve Board
The Supreme Court
U.S. Dept of Treasury
United States Banking Commission
15
Multiple Choice
Which type of bankruptcy involves a repayment plan?
Chapter 13
Chapter 9
Chapter 11
Chapter 7
16
Multiple Choice
Which type of bankruptcy involves liquidation of assets?
Chapter 7
Chapter 9
Chapter 11
Chapter 13
17
Multiple Choice
What should be the top priorities in a monthly budget?
Rent or mortgage, utilities, and food
Entertainment, transportation, and education
Snacks, movies, and other small purchases
Credit card payments and new purchases
18
Multiple Choice
What are some warning signs of serious credit trouble?
Feeling overwhelmed by bills and paying bills late
Reaching credit card limits and applying for new credit cards
Using one credit card to pay off another
All of the above
19
Multiple Choice
Which of the following best describes the difference between secured and unsecured debt?
Secured debt comes from a bank, which is FDIC insured; unsecured debt comes from elsewhere.
Secured debt is covered by the owner's insurance policies; unsecured debt is totally uninsured.
Secured debt must be repaid; unsecured debt should be repaid but doesn't have to be if you can't afford payments.
Secured debt is guaranteed by a physical object, such as your car or house; unsecured debt has no item that could be repossessed for nonpayment.
20
Multiple Choice
21
Multiple Choice
22
Multiple Choice
23
Multiple Choice
What is the role of a bankruptcy trustee in the bankruptcy process?
To oversee the bankruptcy process, liquidate assets, and distribute the proceeds to creditors.
To help the bankrupt individual find a new job
To provide financial assistance to the bankrupt individual
To negotiate with creditors to increase the debt amount
24
Reasons for Bankruptcy
○ Medical Expenses
○ Job Loss
○ Business Losses
○ Natural Disaster
○ Divorce
○ Credit Card Debt
25
Best defense is a good
offense
1.
Have $1,000 emergency fund
2.
Have 3-6+ months expenses
P.S. Home-based business can provide
spending income and tax advantages that
further prevent bad debt.
26
Debt
○ The entire amount of money a person
owes to lenders.
27
Payday Lending
○ “Loan” based on equity of an owned
asset
○ Car worth $1000 after the loan (if any) is
paid
○ Many states do NOT limit the amount of
interest charged.
28
Bankruptcy Basics
1.
Chapter 7
○ LIQUIDATION
○ wipes out all allowable debts and allows
certain personal property exemptions.
2.
Chapter 13
○ REORGANIZATION
○ is a court-approved repayment plan.
29
Consequences of Bankruptcy
○ Influences financial freedom
○ Limits choices
○ Pay more for credit
○ Other people absorb your debt
30
Bankruptcy Laws
○ Requires those filing to get counseling
before they are allowed to file.
○ Bars filers with above-average income
from filing Chapter 7 (liquidation).
○ New debt may not be discharged.
○ Quicker collections process
31
Alternatives to Bankruptcy
○ Out of court settlement
○ Reduction of payments
○ Obtaining help from consumer credit
counseling
○ Payment of debts by selling or borrowing
on property.
32
Things to Consider BEFORE
Filing
• A bankruptcy filing could determine
whether or not you get a job.
• Your insurance rates could rise.
• You may find it difficult to rent an
apartment or qualify for a home loan.
• Bankruptcies stay on your credit report for
7-10 years.
• Bankruptcy will lower your credit score.
33
Things to Do BEFORE Filing:
• Reduce your spending
• Talk with your creditors.
• Talk with a nonprofit counseling agency.
• Talk with an attorney and understand the
consequences of declaring bankruptcy.
• Consider consolidation carefully.
34
TIPS TO REMEMBER
• Keep track of your daily expenses.
• Save money on a regular basis.
• Make changes right away if you see
yourself starting to get into financial
trouble.
• Pay attention to your household finances,
especially if you are married.
35
Snowball and Avalanche
Methods
○ ABL_to_Pay_off_Debt video
○ Snowball: pay debts in order of amount of
money owed, starting with the smallest.
○ Avalanche: pay debts in order of interest
rate, starting with the highest.
○ How the snowball method adds up…
Bankruptcy
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