1. Lesson 8.2 Managing Debt July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved1 Introduction Most of you will acquire debt at some point in your life, but this doesn’t mean you have a financial problem because debt can be good or bad Your knowledge of debt and ability to manage it are the keys to keeping ordinary debt from becoming a financial problem. Today, there are fewer people with debt problems, but there are significantly more people with severe debt problems. Many people attribute this phenomenon to how easy it is to spend more than you earn today.

2. Lesson 8.2 Managing Debt July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved2 Objectives Define the most common types of debt You should be able to do the following after completing this lesson Identify how installment and revolving debt differ Discuss the primary reasons contributing to consumer debt today Review the difference between good and bad debt Describe how you determine if you have too much debt Illustrate what you must do to get out of debt Define bankruptcy, Chapter 7, Chapter 13 and other key terms from this lesson

3. Lesson 8.2 Managing Debt July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved3 8.2.1 – Types of Debt What the 2 most common types of debt are What installment debt is and why it is called closed-end debt What installment debt is used for and how it is repaid What revolving debt is and why it is called open-end debt In this section, you will learn What revolving debt is used for and how it is repaid Installment vs. Fixed Debt Example You will run the following Interactive Example

4. Lesson 8.2 Managing Debt July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved4 8.2.2 – Consumer Debt How interest rates affect consumer debt Why many people are unable to control the amount of debt they accumulate How the Internet affects consumer debt How the actions of the credit card companies affect consumer debt How the cost of attending college affects consumer debt In this section, you will learn

5. Lesson 8.2 Managing Debt July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved5 8.2.3 – Good and Bad Debt Why some debt is good and some debt is bad How to distinguish between good and bad debt What good debt is and how it helps you How good debt affects your net worth What bad debt is and why it doesn’t help you How bad debt affects your net worth In this section, you will learn

6. Lesson 8.2 Managing Debt July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved6 8.2.4 – Too Much Debt How to determine when a person has too much debt Why most people will experience too much debt at some point in their life Why having too much debt might not mean you have a financial problem How you know too much debt has become a financial problem In this section, you will learn

7. Lesson 8.2 Managing Debt July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved7 8.2.5 – Getting Out of Debt Why changing your spending behavior is critical to getting out of debt Why you need a working knowledge of personal finance Why it is important to develop both short and long-term goals Why it is essential to live within your means In this section, you will learn Why a budget is essential to getting out of debt Debt Payment Plan Exercise You will run the following Interactive Exercise

8. Lesson 8.2 Managing Debt July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved8 8.2.6 – The Last Resort - Bankruptcy What happens when you cannot repay your debt The types of debt that cannot be eliminated by bankruptcy What exempt property is What bankruptcy is and how it works In this section, you will learn How many people are filing for bankruptcy Why bankruptcy should only be considered as a last resort Why exempt property is important

9. Lesson 8.2 Managing Debt July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved9 8.2.7 – Types of Bankruptcy How many types of bankruptcy proceedings there are What Chapter 7 bankruptcy is and how it works Why Chapter 7 is also called liquidation bankruptcy What the most common types of bankruptcy are In this section, you will learn What Chapter 13 bankruptcy is and how it works Why Chapter 13 is also called reorganization bankruptcy

10. Lesson 8.2 Managing Debt July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved10 Discussion Questions Is the debt an individual accumulates while going to college good or bad debt? How will the new bankruptcy legislation passed in 2005 affect the number of people who file for personal bankruptcy?