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Chapter 9 Credit Problems and Laws

Chapter 9 Credit Problems and Laws. When Is Bankruptcy a Good Choice?. Bankruptcy is a legal procedure to relieve a person of excessive debt. It can be voluntary or involuntary. It gives debtors a fresh start. It helps ensure fair treatment for creditors.

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Chapter 9 Credit Problems and Laws

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  1. Chapter 9 Credit Problems and Laws

  2. When Is Bankruptcy a Good Choice? • Bankruptcy is a legal procedure to relieve a person of excessive debt. • It can be voluntary or involuntary. • It gives debtors a fresh start. • It helps ensure fair treatment for creditors. • It should be a last resort because it damages your credit rating. 9-2 Bankruptcy Choices Slide 2

  3. Avoiding Bankruptcy • Credit counseling • Sets up a budget and arranges a payment plan • Debt management • Creates a plan to pay off debt • Debtor must turn over checking account and give up credit cards • Debt consolidation • Process of getting one loan to pay off all debts 9-2 Bankruptcy Choices Slide 3

  4. What Are the Types of Bankruptcy? • Chapter 7 • Also called straight or liquidation bankruptcy • Involves the forfeiture of assets in exchange for discharge of debts • Allows for exemptions, or property that a debtor does not have to forfeit, such as tools of trade 9-2 Bankruptcy Choices Slide 4

  5. What Are the Types of Bankruptcy? • Chapter 11 • Also called a reorganization • It is the reorganization of debt as decided by the court. • Allows a business to remain viable • Chapter 13 • Also called individual debt adjustment • Involves a 3- to 5-year repayment plan for some of the debt 9-2 Bankruptcy Choices Slide 5

  6. Building Communications Skills Persuasive Speaking • Open with attention-getting remarks. • Clearly state the position or action you want listeners to support. • Give supporting data or quotes to strengthen your position. • Prepare for negative reactions or questions. • Listen to campaign speeches and apply techniques to your speech. 9-2 Bankruptcy Choices Slide 6

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