Personal Finance: Credit and Bankruptcy

A set of vocabulary flashcards based on personal finance concepts related to credit and bankruptcy.

Consumer Credit

Credit extended to consumers for personal use.

Fair Debt Collection Practices Act (FDCPA)

The law that regulates debt collection agencies and prohibits abusive collection practices.

Bankruptcy

A legal process in which a debtor's assets are distributed among creditors because they are unable to pay their debts.

Chapter 7 Bankruptcy

A type of bankruptcy where many debts are forgiven and most assets are sold to pay creditors.

Chapter 13 Bankruptcy

A voluntary repayment plan for individuals with a regular income, allowing them to keep property while making regular payments.

Credit Counselor

A professional who provides guidance on managing debt and finances.

Debt Repayment Plan

A structured plan to pay back debts over time, often arranged by a credit counselor.

Interest

The cost of borrowing money, usually expressed as a percentage of the loan amount.

Garnishments

A legal process where a portion of a debtor's earnings is withheld to pay a debt.

Consumer Credit Counseling Services (CCCS)

Nonprofit organizations that provide debt counseling services and help individuals set up budgets.

Danger Signals of Debt Problems

Indicators that suggest a person may be experiencing financial distress, such as missing payments or borrowing to pay debts.

Finance Charges

The cost of borrowing, including interest and any additional fees associated with a loan.

Verification of Debt

The process by which a debtor can request proof of the nature and amount of a debt, required under the FDCPA.

Debt Collection Agencies

Companies that specialize in collecting debts on behalf of creditors.