Consumer Issues, Credit, and Bankruptcy Lecture Notes

Vocabulary based flashcards covering negotiable instruments, credit law, consumer protection statutes, and the various chapters of the U.S. Bankruptcy Code.

Negotiable Instruments

Written and signed promises or orders to pay a fixed amount of money, which must be unconditional and payable on demand or at a set time to an order or bearer.

Drafts

A common form of negotiable instrument consisting of a binding order for a bank to pay a sum of money.

Checks

A specific type of negotiable instrument that is payable on demand.

Promissory Notes

A promise by one party to pay another party a fixed amount of money.

Certificates of Deposit (CDs)

A promise by a bank to repay a sum of money it has received.

Credit

Borrowed money where a creditor lends to a debtor, who must repay the principal amount, usually with interest, within a specific timeframe.

Secured Credit

A form of credit where the creditor is entitled to collateral as part of debt satisfaction if the debtor fails to pay as promised.

Collateral

Property belonging to the debtor that a creditor is entitled to in the event of default on a secured credit agreement.

Suretyship

A form of secured credit by agreement where a third party promises to pay on behalf of the debtor if they fail to pay.

Guaranty

A security arrangement where a third party provides a guarantee of payment on behalf of the debtor if they fail to pay.

Real Property Mortgages

A type of lien where the mortgagor retains the right to foreclose upon and resell property if the mortgagee fails to repay the mortgage.

Liens

Security obtained through the operation of law that gives a creditor the legal right to repossess goods held by the debtor if they default.

Truth-in-Lending Act (TILA)

$15$ U.S.C. $\S\S 1601-1667f$, which requires creditors to make written disclosures of financial responsibilities such as APRs and transaction fees.

Consumer Lending Act

A law covering personal leases extended over four months with an obligation value not exceeding $\$50,000$.

Consumer Credit Card Act

An amendment to TILA that restricts fees and interest rate increases and specifies when bills must be distributed.

Fair Credit Reporting Act (FCRA)

A law that regulates credit bureaus and provides for accuracy in credit reports.

Fair & Accurate Credit Transaction Act

A law that amended the FCRA to provide consumers with free annual credit reports.

Equal Credit Opportunity Act (ECOA)

A law prohibiting credit discrimination based on factors such as race, sex, color, religion, national origin, marital status, poverty, or age.

Fair Debt Collection Practices Act (FDCPA)

Provides for transparent debt collection and allows a debtor to dispute the validity of a debt within $30$ days.

WA Consumer Protection Act

RCW $19.86$, a state law enforced by the Washington Attorney General.

The Bankruptcy Code

U.S.C. Title $11$, enacted by Congress in $1978$ under the authority of Article I, Section $8$ of the U.S. Constitution.

Chapter 7 Bankruptcy

A typically voluntary filing by individuals or businesses for the discharge of debts due to inability to repay, sometimes involving the liquidation of assets.

Chapter 13 Bankruptcy

A voluntary bankruptcy available only for individual debtors and sole proprietorships that provides for a court-protected repayment plan over several years.

Chapter 11 Bankruptcy

A bankruptcy option for businesses that wish to remain in operation by restructuring their debts and negotiating a repayment plan with creditors.