Credit Whole or partial payment is delayed Pawn Collateral Secured/Unsecured Loan Garnishment Finance Charges Credit Rating

Involuntary Liens Lien – a legal right in another’s property as security for the performance of an obligation Mechanic’s Lien - a lien against realty available to one who has supplied labor or materials to improve it Artisan’s Lien - a lien for unpaid services assessed against personal property that has been improved

Credit and Third Parties Surety – third party agrees to be primarily liable if the payments are late Guarantor – third party agrees to be secondarily liable if the payments are late

Credit System Abuses - Laws Federal Equal Credit Opportunity Act Federal Fair Debt Collection Practices Act Federal Fair Credit Billing Act Federal Fair Credit Reporting Act Federal Credit Repair Organizations Act Pages

Bankruptcy A legal process to get out of debt when you can no longer make all your required payments. Source: NEFE

Bankruptcy Basics Chapter 7 LIQUIDATION or “Straight Bankruptcy” Wipes out most of your debt in exchange for liquidating your assets Chapter 13 REORGANIZATON OF DEBTS Keep Assets and make payments over 3-5 years Chapter 11 (Businesses) REORGANIZATION OF THE COMPANY

Bankruptcy Procedures Non-dischargeable Debts see page 619 Exempt Property see page

National Bankruptcy #s The number of personal bankruptcy filings in the fiscal year ending September 30, 2003, rose 7.8% from the same period in 2002, reaching 1,625,813, according to the American Bankruptcy Institute (ABI). That’s twice the number of people filing for personal bankruptcy protection in 1993.

Situations for filing bankruptcy.

Consequences of Bankruptcy Influences financial freedom Limits choices Pay more for credit Other people absorb your debt Even though it is legal is it unethical????? Yes, No, Depends?

Franchise Different Types Distributorships (Toyota, Mercedes, Ford, etc.) Trademark (CocaCola, Miami Dolphins, etc.) Business (Circle K, Subway, Big O)

Franchise “Franchisors” sell the rights to their business logo, name, and model to third parties operators, “Franchisees” Franchise Agreements – initial fee, training, equipment, uniforms, signage, royalties, pricing