UNIT 25. Default And Collection Practices

1. Complete the sentences, using the appropriate words from the box:

Pay off; bankruptcy; default; consequences; reassess; wiped out; overextended.

1. Consumers who use credit sometimes have difficulty making all their payments because consumers are ….

2. A consumer who is unable or unwilling to pay a debt goes into ….

3. If you have problems paying your bills, you should … your financial lifestyle to determine where the problem arose.

4. … is a procedure through which a person places assets under the control of a federal court in order to be relieved of debt.

5. A wage earner can make an arrangement, supervised by a federal court, to … some or all of what is owed to creditors over an extended period of time.

6. A declaration of bankruptcy has serious long–term … for the debtor.

7. Some debts are not … through bankruptcy.

2. Are the statements true (+) or false (-)? Correct the false statements.

1. Problems with making payments can arise because of unexpected unemployment, family illness, or a variety of other reasons.

2. If you have problems paying your bills, you should not notify each creditor of the problem.

3. A consumer who is unable or unwilling to pay a debt goes into bankruptcy.

4. In recent years, a few bankruptcies have been filed in the United States.

5. A more severe form of bankruptcy is called a Chapter 7 bankruptcy when the federal court takes control of most of the debtor’s assets, sells them, and pays off as much debt as possible.

6. Records of personal bankruptcy remain in credit reports for 15 years.

7. All debts (taxes, alimony, child support, and student loans) are wiped out through bankruptcy.