Question 1

In a straight bankruptcy,many,but not all,debts are forgiven.

Accepted Answer

A) True 
 B)False

Question 2

Collection agencies are allowed to:

Accepted Answer

A)  contact you at your place of employment.
B)  contact you as early as 8 am.
C)  say that you will be arrested if you do not pay the debt.
D)  harass you.
E)  threaten harm to you or your family.F) A) and B)
G) All of the above

Question 3

The Truth in Lending law does not set the interest rates or tell the creditor how to make interest calculations.

Accepted Answer

A) True 
 B)False

Question 4

What is the most common reason why consumers are unable to pay their bills on time?

Accepted Answer

A)  Medical expenses
B)  Defective goods and services
C)  Excessive use of credit
D)  Fraudulent use of credit
E)  Consumer fraudF) A) and B)
G) B) and C)

Question 5

With the add-on interest method,interest is calculated on the full amount of the original principal.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not true of debt collection in the United States?

Accepted Answer

A)  The industry employs nearly 120,000 workers.
B)  It includes calls and letters.
C)  It includes filing lawsuits to collect the debt from consumers.
D)  It includes workers across approximately 8,000 collection agencies.
E)  It is only a $1 million industry.F) C) and D)
G) B) and E)

Question 7

For some debtors,bankruptcy had become an acceptable tool of credit management based on the number of declared bankruptcies in 2005.

Accepted Answer

A) True 
 B)False

Question 8

A few months ago,you sent a certified letter to a debt collector and requested verification of a debt the collector says you owe.You know the letter was received by the collector but you have not received a response to your request.Today,you received a letter threatening court action.What should you do?

Accepted Answer

A)  Pay the debt and protect your credit rating
B)  Insist that communications about the debt cease
C)  Renegotiate payment terms with the creditor
D)  Sue the collection agency
E)  Pay half the outstanding balanceF) A) and E)
G) C) and E)

Question 9

The most basic method of calculating interest is the compound interest calculation.

Accepted Answer

A) True 
 B)False

Question 10

You may be able to borrow at a lower interest rate if you accept a shorter-term loan.

Accepted Answer

A) True 
 B)False

Question 11

The consumer credit laws require that an advance notice be given before repossessing a car.

Accepted Answer

A) True 
 B)False

Question 12

Chuck Stallings qualifies for an American Express card.Which of the following offers this type of loan?

Accepted Answer

A)  Credit union
B)  Check casher
C)  Finance company
D)  T&E card
E)  Commercial bankF) All of the above
G) A) and B)

Question 13

In a Chapter 7 bankruptcy,the debtor:

Accepted Answer

A)  is required to draw up a petition listing his or her assets and liabilities.
B)  does not have to pay a filing fee.
C)  is called a "bankrupt."
D)  does not have to pay outstanding alimony and child support payments.
E)  does not have to repay educational loans.F) A) and B)
G) A) and C)

Question 14

The Federal Trade Commission enforces the:

Accepted Answer

A)  Truth in Credit Act.
B)  Equal Credit Act.
C)  Fair Credit Receiving Act.
D)  Fair Debt Collection Practices Act.
E)  Fair Credit Payment Act.F) All of the above
G) B) and C)

Question 15

Parents or family members are often the source of the least expensive loans.

Accepted Answer

A) True 
 B)False

Question 16

Payday,cash advance,check advance,and postdated checks are ________ loans.

Accepted Answer

A)  inexpensive
B)  medium-priced
C)  expensive
D)  low APR
E)  variable APRF) All of the above
G) A) and D)

Question 17

In what ways can you lower the risk to your lender in order to reduce your borrowing costs?

Accepted Answer

One can take one or more of the followin...

Question 18

The two most common methods of calculating interest are compound and simple interest formulas.

Accepted Answer

A) True 
 B)False

Question 19

The annual percentage rate is the percentage cost (or relative cost)of credit on a yearly basis.

Accepted Answer

A) True 
 B)False

Question 20

"Keeping up with the Joneses" is one of the frequent reasons for indebtedness.

Accepted Answer

A) True 
 B)False

Exam 7: Choosing a Source of Credit: the Costs of Credit Alternatives

What is the most common reason why consumers are unable to pay their bills on time?

Correct Answer
verified

The consumer credit laws require that an advance notice be given before repossessing a car.

Correct Answer
verified

For some debtors,bankruptcy had become an acceptable tool of credit management based on the number of declared bankruptcies in 2005.

Correct Answer
verified

The two most common methods of calculating interest are compound and simple interest formulas.

Correct Answer
verified

You may be able to borrow at a lower interest rate if you accept a shorter-term loan.

Correct Answer
verified

Which of the following is not true of debt collection in the United States?

Correct Answer
verified

Correct Answer
verified

The Truth in Lending law does not set the interest rates or tell the creditor how to make interest calculations.

Correct Answer
verified

Parents or family members are often the source of the least expensive loans.

Correct Answer
verified

In what ways can you lower the risk to your lender in order to reduce your borrowing costs?

Correct Answer
verified
One can take one or more of the followin...
View Answer

"Keeping up with the Joneses" is one of the frequent reasons for indebtedness.

Correct Answer
verified

In a straight bankruptcy,many,but not all,debts are forgiven.

Correct Answer
verified

The annual percentage rate is the percentage cost (or relative cost)of credit on a yearly basis.

Correct Answer
verified

With the add-on interest method,interest is calculated on the full amount of the original principal.

Correct Answer
verified

In a Chapter 7 bankruptcy,the debtor:

Correct Answer
verified

The Federal Trade Commission enforces the:

Correct Answer
verified

Collection agencies are allowed to:

Correct Answer
verified

The most basic method of calculating interest is the compound interest calculation.

Correct Answer
verified

Chuck Stallings qualifies for an American Express card.Which of the following offers this type of loan?

Correct Answer
verified

Payday,cash advance,check advance,and postdated checks are ________ loans.

Correct Answer
verified

Exam 7: Choosing a Source of Credit: the Costs of Credit Alternatives

What is the most common reason why consumers are unable to pay their bills on time?

Correct AnswerverifiedShow Answer

The consumer credit laws require that an advance notice be given before repossessing a car.

Correct AnswerverifiedShow Answer

For some debtors,bankruptcy had become an acceptable tool of credit management based on the number of declared bankruptcies in 2005.

Correct AnswerverifiedShow Answer

The two most common methods of calculating interest are compound and simple interest formulas.

Correct AnswerverifiedShow Answer

You may be able to borrow at a lower interest rate if you accept a shorter-term loan.

Correct AnswerverifiedShow Answer

Which of the following is not true of debt collection in the United States?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Truth in Lending law does not set the interest rates or tell the creditor how to make interest calculations.

Correct AnswerverifiedShow Answer

Parents or family members are often the source of the least expensive loans.

Correct AnswerverifiedShow Answer

In what ways can you lower the risk to your lender in order to reduce your borrowing costs?

Correct AnswerverifiedOne can take one or more of the followin...View AnswerShow Answer

"Keeping up with the Joneses" is one of the frequent reasons for indebtedness.

Correct AnswerverifiedShow Answer

In a straight bankruptcy,many,but not all,debts are forgiven.

Correct AnswerverifiedShow Answer

The annual percentage rate is the percentage cost (or relative cost)of credit on a yearly basis.

Correct AnswerverifiedShow Answer

With the add-on interest method,interest is calculated on the full amount of the original principal.

Correct AnswerverifiedShow Answer

In a Chapter 7 bankruptcy,the debtor:

Correct AnswerverifiedShow Answer

The Federal Trade Commission enforces the:

Correct AnswerverifiedShow Answer

Collection agencies are allowed to:

Correct AnswerverifiedShow Answer

The most basic method of calculating interest is the compound interest calculation.

Correct AnswerverifiedShow Answer

Chuck Stallings qualifies for an American Express card.Which of the following offers this type of loan?

Correct AnswerverifiedShow Answer

Payday,cash advance,check advance,and postdated checks are ________ loans.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
One can take one or more of the followin...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified