Chapter 14: Finance of Sales and Leases - Credit and Disclosure Requirements
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Explain state usury laws.
the act of charging an interest higher than the maximum permitted by law
What's the significance of the Equal Credit Opportunity Act?
designed to make sure that if a loan applicant was extended or denied a line of credit based on their merit alone
Who enforces the Equal Credit Opportunity Act?
- the FTC (Federal Trade Commission)
- the U.S. Attorney General's office
- the legislation itself
What's the significance of the TILA (Truth in Lending Act)?
it tries to make sure debtors are treated fairly through the adequate disclosure of credit terms
What are the 4 requirements for application into the TILA?
- 1. The debtor is a person (not a business)
- 2. For consumer or household/personal use
- 3. The creditor is in the business of extending credit
- 4. The credit must be subject to some kind of finance charge (it’s not a free loan)
What is the significance of the Fair Credit Billing Act?
It is intended to protect consumers from errors on billing statement errors.
What is the significance of the Fair Credit Reporting Act?
It is a federal legislation designed to protect debtors by way of their credit information held by third parties.
What are some things the Fair Debt Collection Practices act protects us from?
- Threats of physical violence
- Verbal abuse
- Creditor is not supposed to show up at inconvenient places
- Creditors need to act reasonably and responsibly
Bankruptcy was originally established to give _____ a fresh start. It is a _____ law and an _____ process.
What is Chapter 7 bankruptcy?
Who can file Chapter 7 bankruptcy?
people AND businesses
What is a Chapter 11 bankruptcy?
Who can file Chapter 11 bankruptcy?
often used by businesses, but people can file as well
Once a debtor files or is forced to file Chapter 11 bankruptcy, creditors are kept from the debtor's _____.
What is Chapter 13 bankruptcy?
the Wage Earner Petition
Who can file Chapter 13 bankruptcy?
What are the two priority creditors?
child support/alimony & wages to employees
What are three non-dischargeable debts?
- student loans
- child support/spousal support
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