BL Chapter 12 Worksheet
True/False
Indicate whether the statement is true or false.
____
1. All debts may be discharged under the Bankruptcy Act.
____
2. If a debtor defaults on a loan, the creditor does not have the right to withhold money from the worker’s
paycheck.
____
3. The Consumer Credit Protection Act is also known as the Truth in Lending Law.
____
4. A lawyer’s duty of confidentiality to a client is essential to establish trust and protect the interests of the
client.
____
5. Debts caused by fraud or back taxes still have to be repaid even if you qualify for bankruptcy.
____
6. Debit cards can no longer be used the minute a petition for bankruptcy is filed.
____
7. Involuntary bankruptcy is when the debtor files for bankruptcy even though he or she wants to retain some
assets.
____
8. Bankruptcy law is not found in federal statutory law; instead, it is found in each state’s statutes.
____
9. When filing for Chapter 7 bankruptcy, the debtor must have a family income below the state’s average family
income.
____ 10. There are only two reasons a creditor may deny credit: low income or large current debts.
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____ 11. If you believe an error has been made on your credit card bill, how long do you have to notify the creditor
from the date of the credit card statement?
a. one week
c. 30 days
b. 60 days
d. 90 days
____ 12. To assist consumers who receive bills for charges they dispute, Congress passed the
a. Fair Credit Billing Act.
c. Fair Credit Reporting Act.
b. Fair Debt Collection Practices Act.
d. Disputed Charges Reform Act.
____ 13. The Fair Debt Collection Practices Act makes it illegal for
a. creditors to report you as being delinquent because you are disputing a bill.
b. you to seek the services of a credit repair organization.
c. debt collectors to impersonate government officials.
d. banks and businesses to discriminate against potential creditors.
____ 14. The moment a petition for bankruptcy is filed in the court,
a. all debts are cleared.
b. your credit cards no longer work.
c. lawsuits involving divorce and child custody are suspended.
d. an automatic stay goes into effect.
____ 15. Ordinary bankruptcy is also called
a. Chapter 7.
b. Chapter 11.
c. Chapter 12.
d. Chapter 13.
____ 16. The form of bankruptcy that lets family farmers develop a plan for debt repayment and keep their business
running is called
a. Chapter 7.
c. Chapter 12.
b. Chapter 11.
d. Chapter 13.
____ 17. During the period of repayment under Chapter 13 bankruptcy,
a. businesses can keep 50% of their debt.
b. creditors may expect a minimum of $500 per month in repayment.
c. creditors may not continue collection activities.
d. businesses must reorganize their financial structure.
____ 18. When the debtor’s property is sold to obtain cash, which debts are paid first?
a. alimony and support
c. taxes
b. secured debts
d. unsecured debts
____ 19. Which of the following is NOT one of the national credit reporting agencies in the United States?
a. Equifax
c. Experian
b. Trans Union
d. Trans Credit
____ 20. Under old English law, people who could not pay their bills were
a. put into debtor’s prisons.
b. put to work on farms until the debt was paid off.
c. sent out of the country.
d. sentenced to death.
Completion
Complete each statement.
21. Creditors have a right to ____________________ property when a debtor defaults on a loan.
22. The ____________________ Law requires that lenders tell you both the finance charge and the annual
percentage rate (APR) of the loan.
23. Under the ____________________ Act, you have the right to know anyone who has received a copy of your
credit report in the past year.
24. ____________________ bankruptcy offers a method for businesses to reorganize their financial affairs and
still remain in business.
25. As part of the "fresh start" policy of the Bankruptcy Act, some assets, called ____________________, can be
kept by the debtor.
26. The ____________________ Act requires creditors to correct billing errors that are brought to their attention.
27. The nonprofit organization that provides confidential debt-counseling services is called the Consumer
____________________ Service.
28. Some debts, such as student loans (except in cases of extreme hardship) or back taxes, cannot be
____________________ because of bankruptcy.
29. A bankruptcy filing remains on a debtor’s credit report for ____________________ years.
Matching
Match each term with its definition.
a. garnishment
b. usury law
c. Consumer Credit Protection Act
d. Fair Credit Reporting Act
e. Equal Credit Opportunity Act
f.
g.
h.
i.
j.
Fair Credit Billing Act
Chapter 7 bankruptcy
Chapter 11 bankruptcy
repossession
bankruptcy
____ 30. A law that grants people the right to know their own personal information that is in a credit reporting
agency’s files
____ 31. A law that makes it illegal to discriminate against credit applicants
____ 32. A law restricting the amount of interest that can be charged
____ 33. Allows individual debtors to discharge their debts and get a fresh start
____ 34. Requires creditors to correct billing errors brought to their attention
____ 35. Also known as the Truth in Lending Law
____ 36. A legal procedure through which a worker’s earnings are withheld to pay a debt
____ 37. When a creditor reclaims property on which it was a lien
____ 38. Allows businesses to reorganize their financial affairs and still remain in business
____ 39. The legal process by which a debtor can make a fresh start through the sale of assets to pay off creditors
BL Chapter 12 Worksheet
Answer Section
TRUE/FALSE
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
ANS:
ANS:
ANS:
ANS:
ANS:
NAT:
ANS:
ANS:
NAT:
ANS:
NAT:
ANS:
NAT:
ANS:
F
PTS: 1
F
PTS: 1
T
PTS: 1
T
PTS: 1
T
PTS: 1
NBEA VID
T
PTS: 1
F
PTS: 1
NBEA VID | NBEA VID3b
F
PTS: 1
NBEA VID
T
PTS: 1
NBEA VID
F
PTS: 1
DIF:
DIF:
DIF:
DIF:
DIF:
2
2
1
2
1
REF:
REF:
REF:
REF:
265
266
280
274
DIF: 1
DIF: 2
REF: 273
REF: 273
DIF: 2
REF: 273
DIF: 2
REF: 273
DIF: 2
REF: 267
DIF: 1
DIF: 2
REF: 255
REF: 269
DIF: 2
REF: 269
DIF: 2
REF: 273
DIF: 1
REF: 273
DIF: 1
REF: 274
DIF: 2
REF: 274
DIF: 2
REF: 275
DIF: 1
DIF: 1
REF: 266
REF: 271
MULTIPLE CHOICE
11. ANS: B
PTS: 1
12. ANS: A
PTS: 1
NAT: NBEA IIC3a
13. ANS: C
PTS: 1
NAT: NBEA IIC3a
14. ANS: D
PTS: 1
NAT: NBEA VID
15. ANS: A
PTS: 1
NAT: NBEA VID | NBEA VID3a
16. ANS: C
PTS: 1
NAT: NBEA VID | NBEA VID3a
17. ANS: C
PTS: 1
NAT: NBEA VID | NBEA VID3a
18. ANS: B
PTS: 1
NAT: NBEA VID | NBEA VID3c
19. ANS: D
PTS: 1
20. ANS: A
PTS: 1
COMPLETION
21. ANS: Repossess
PTS: 1
DIF: 2
22. ANS: Truth in Lending
REF: 265
PTS: 1
DIF: 2
23. ANS: Fair Credit Reporting
REF: 266
NAT: NBEA IIC3a
PTS: 1
24. ANS: Chapter 11
DIF: 2
REF: 266
NAT: NBEA IIC3a
PTS: 1
25. ANS: exemptions
DIF: 2
REF: 274
NAT: NBEA VID | NBEA VID3a
PTS: 1
DIF: 2
26. ANS: Fair Credit Billing
REF: 274
NAT: NBEA VID | NBEA VID3a
PTS: 1
DIF: 2
27. ANS: Credit Counseling
REF: 269
NAT: NBEA IIC3a
PTS: 1
28. ANS: discharged
DIF: 2
REF: 272
PTS: 1
29. ANS: ten
DIF: 2
REF: 274-275
DIF: 1
REF: 275
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
DIF:
DIF:
DIF:
DIF:
DIF:
DIF:
DIF:
DIF:
DIF:
DIF:
PTS: 1
NAT: NBEA VID
MATCHING
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
D
E
B
G
F
C
A
I
H
J
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
NAT: NBEA IIC3a
NAT: NBEA IIC3a
NAT: NBEA VID3a
NAT: NBEA IIC3a
NAT: NBEA IIC3a
NAT: NBEA VID | NBEA VID3a