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Credit Test

Multiple Choice
Identify the choice that best completes the statement or answers the question.
 

 1. 

Bankruptcy exemptions may include which of the following?
a.
household goods up to $15,525
c.
tools of trade up to $11,525
b.
homestead (home equity) up to $21,625
d.
jewelry up to $10,000
 

 2. 

Which of the following levels of alternative dispute resolution (ADR) does not require a neutral third party?
a.
negotiation
c.
mediation
b.
litigation
d.
arbitration
 

 3. 

Under which type of bankruptcy does the debtor (Business) follow a court-approved plan to pay back as much debt as possible over a three- to five-year period?
a.
Chapter 13 bankruptcy
c.
Chapter 7 bankruptcy
b.
Chapter 17 bankruptcy
d.
Chapter 11 bankruptcy
 

 4. 

The maximum amount of a dispute that may be filed in a small claims court is usually less than
a.
$50,000
c.
$10,000
b.
$5,000
d.
$1,000
 

 5. 

The legal process that allows a lender to take possession of a house because the borrower does not meet his or her mortgage obligations is called
a.
discharge
c.
garnishment
b.
bankruptcy
d.
foreclosure
 

 6. 

The Truth-in-Lending Act requires which of the following to be put in writing before a loan or credit agreement is signed?
a.
the annual percentage rate
b.
any service fees or other costs added to the price
c.
the total finance charge and method of computing it
d.
all of these
 

 7. 

Which of the following methods of avoiding bankruptcy requires you to turn over your checking account and bills to a debt manager?
a.
debt consolidation
c.
credit counseling
b.
credit protection service
d.
debt management
 

 8. 

Under which type of bankruptcy is all debt erased?
a.
Chapter 17 bankruptcy
c.
Chapter 11 bankruptcy
b.
Chapter 7 bankruptcy
d.
Chapter 13 bankruptcy
 

 9. 

Which of the following laws limits a person’s liability to $50 after a credit card has been reported lost or stolen?
a.
Fair Credit Reporting Act
c.
Truth-in-Lending Act
b.
Credit Card Act of 2009
d.
Fair Credit Billing Act
 

 10. 

Which of the following laws grants you the right to know what is in your credit file?
a.
Fair Credit Reporting Act
c.
Credit Card Act of 2009
b.
Truth-in-Lending Act
d.
Fair Credit Billing Act
 

Completion
Complete each statement.
 

 11. 

To help keep a watchful eye on your credit file, you may want to enroll in a(n) __________, which is a plan that provides credit monitoring for a fee.
 

 

 12. 

A(n) __________ is a second mortgage or debt secured with the equity in your home.
 

 

 13. 

In a lawsuit, the person filing the complaint is called the __________.
 

 

 14. 

If the bankruptcy court suspects that a debtor has purposely overspent while staying below the allowable exemption amounts, it may dismiss the bankruptcy case and prosecute the debtor for bankruptcy __________.
 

 

 15. 

When a car is pledged as collateral on a secured loan and the debtor fails to make payments, the creditor may __________ the car and sell it to pay the debt.
 

 

 16. 

The __________ Act protects consumers from discrimination in the granting or denying of credit.
 

 

 17. 

When a creditor has a legal __________ order, part of an employee’s paycheck is withheld and sent directly from the employer to the creditor.
 

 

 18. 

A(n) __________ is a court order that pardons the debtor from having to pay debts.
 

 

 19. 

The process of helping consumers resolve problems with creditors and others is called __________.
 

 

 20. 

With __________ scams, a company claims to be able to “fix” your poor credit record and give you a clean credit history.
 

 

True/False
Indicate whether the statement is true or false.
 

 21. 

The Fair Credit Billing Act requires credit card companies to have billing error policies and inform their customers how to report errors.
 

 22. 

With all forms of bankruptcy, the debtor has an automatic stay, which provides immediate protection from any further action by creditors.
 

 23. 

Bankruptcy stays on a persons credit record for up to 14 years.
 

 24. 

If you order your credit report online, you can have access to it within minutes.
 

 25. 

A person can be forced into involuntary bankruptcy if creditors petition the court to do so.
 

 26. 

Consumers have the right to one free copy of their credit reports annually.
 

 27. 

The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 made it easier for consumers to file Chapter 7 bankruptcy.
 

 28. 

While a billed amount is in dispute, the creditor cannot charge interest on that amount.
 

 29. 

When a debtor files bankruptcy, he or she must give up all owned property.
 

 30. 

Debtors are required to receive credit counseling from a government-approved organization within six months before filing for any bankruptcy relief to ensure that bankruptcy is the best option.
 

 31. 

It is unlawful for a debt collector to call you at your place of work.
 

 32. 

A consumer has 90 days from the day a bill is received to file a dispute.
 

 33. 

One purpose of bankruptcy law is to ensure fair treatment for creditors.
 

 34. 

It is illegal for a telemarketer to ask for an upfront fee in order for you to claim a prize.
 

 35. 

Chapter 17 bankruptcy is intended for business owners.
 



 
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