1. Chapter 9 Credit Problems and Laws

2. Slide 2 When Is Bankruptcy a Good Choice? Bankruptcy is a legal procedure to relieve a person of excessive debt. It can be voluntary or involuntary. It gives debtors a fresh start. It helps ensure fair treatment for creditors. It should be a last resort because it damages your credit rating. 9-2 Bankruptcy Choices

3. Slide 3 Avoiding Bankruptcy 9-2 Bankruptcy Choices Credit counseling o Sets up a budget and arranges a payment plan Debt management o Creates a plan to pay off debt o Debtor must turn over checking account and give up credit cards Debt consolidation o Process of getting one loan to pay off all debts

4. Slide 4 What Are the Types of Bankruptcy? 9-2 Bankruptcy Choices Chapter 7 o Also called straight or liquidation bankruptcy o Involves the forfeiture of assets in exchange for discharge of debts o Allows for exemptions, or property that a debtor does not have to forfeit, such as tools of trade

5. Slide 5 What Are the Types of Bankruptcy? 9-2 Bankruptcy Choices Chapter 11 o Also called a reorganization o It is the reorganization of debt as decided by the court. o Allows a business to remain viable Chapter 13 o Also called individual debt adjustment o Involves a 3- to 5-year repayment plan for some of the debt

6. Slide 6 Building Communications Skills 9-2 Bankruptcy Choices Persuasive Speaking Open with attention-getting remarks. Clearly state the position or action you want listeners to support. Give supporting data or quotes to strengthen your position. Prepare for negative reactions or questions. Listen to campaign speeches and apply techniques to your speech.