Level 1
the use of someone else’s money, borrowed now with the agreement to pay it back later
Credit
tells potential creditors the likelihood that you will repay debt as agreed
Credit Score
the interest rate that banks offer to their best business customers, such as large corporations
Prime Rate
means following an individual plan for using credit wisely
Credit Management
when creditors file a petition with the court, asking the court to declare you, the debtor, bankrupt
Involuntary Bankruptcy
a person who borrows money from others
Debtor
a written statement of a consumer’s credit history, issued by a credit bureau to businesses
Credit Report
uses online pop-up messages or e-mail to deceive you into disclosing personal information
Phishing
a plan to limit the use of credit to no more than 20 percent of your yearly take-home pay, with payments no more than 10 percent of monthly take-home pay
20/10 Rule
(reorganization) Allows a business to continue operating under court supervision as it repays restructured debts
Chapter 11 BR
a legal business that makes high-interest loans based on the value of personal possessions pledged as collateral
Pawnbroker
a consumer request that requires the credit bureaus to deny all access to a consumer’s credit information or files
Credit Freeze
the remaining credit available to you on current accounts
Unused Credit
putting some or all of your debt into one loan
Debt Consolidation
(straight bankruptcy) a liquidation form of bankruptcy for individuals. It wipes out most debts in exchange for giving up most assets
Chapter 7 BR
the total dollar amount of all interest and fees you pay for the use of credit
Finance Charge
a business that gathers, stores, and sells credit information to other businesses
Credit Bureau
the amount borrowed, or the unpaid portion of the amount borrowed, on which the borrower pays interest
Principal
occurs when you file a petition with a federal court asking to be declared bankrupt
Voluntary Bankruptcy
(payment plan) Allows debtors to keep most of their property and to pay a portion of their debts over 3-5 years
Chapter 13 BR
property pledged to assure repayment of a loan
Collateral
the act of treating people differently based on prejudice rather than individual merit
Discrimination
which is part of the purchase price paid in cash up front
Down Payment
the agreement to pay debts that have been legally discharged
Reaffirmation
checking several places to be sure you are getting the best price for equal quality
Comparison Shopping