Digging Out Of Debt Final Exam

You can dig out of debt with enough motivation, discipline, and patience.

True
False

Which of the following are reasons you may want to reduce debt

You feel overwhelmed by the cost of the payments
You feel overwhelmed by the number of bills
You regret making past mistakes
All of the above

What is the debt avalanche plan?

A plan to pay off your highest interest debt first while continuing to make minimum payments on all of your other debts
A plan that works by making major lifestyle changes that help you to aggressively tackle all of your debts at once
A plan to pay off your smallest loan or credit card first while making minimum payments on the rest of your loans and cards
None of the above

What is the debt snowball plan?

A plan to pay off your highest interest debt first while continuing to make minimum payments on all of your other debts
A plan to pay off your smallest loan or credit card first while making minimum payments on the rest of your loans and cards
A plan that works by making major lifestyle changes that help you to aggressively tackle all of your debts at once

What is the debt tornado plan?

A plan to pay off your highest interest debt first while continuing to make minimum payments on all of your other debts
A plan to pay off your smallest loan or credit card first while making minimum payments on the rest of your loans and cards
A plan that works by making major lifestyle changes that help you to aggressively tackle all of your debts at once
None of the above

What is debt consolidation?

A process for paying off multiple high-interest debts using a lower-interest loan
A process, often offered by nonprofit organizations, where a credit counselor helps you to develop a budget and work with your lenders to pay off your debts
A process where a lender accepts one large payment, typically 10 to 50 percent of your total loan balance, in exchange for forgiving your debt.
A federal legal process that allows individuals or businesses to have their debts forgiven while providing some repayment to their lenders

When may debt consolidation be appropriate for you?

When you feel lost and like you can’t do it alone
When your credit score is ruined
If you have a good to excellent credit score and are able to qualify for the best interest rates
If you have trouble remembering when to pay your bills

A balance transfer credit card is a credit card that offers a zero percent introductory APR for a short time, typically from one to two years, that you can use to pay off the balance of other cards.

True
False

What is credit counseling?

A process for paying off multiple high-interest debts using a lower-interest loan
A process, often offered by nonprofit organizations, where a credit counselor helps you to develop a budget and work with your lenders to pay off your debts
A process where a lender accepts one large payment, typically 10 to 50 percent of your total loan balance, in exchange for forgiving your debt.
A federal legal process that allows individuals or businesses to have their debts forgiven while providing some repayment to their lenders

Which of the following are questions you should ask before signing up for a credit counseling program?

Is your organization accredited?
How much do I have to pay to use your service?
Will your program affect my credit?
How long will your program take to complete?
Who do I owe once I am in the program?
How often will I hear from you?

What is debt settlement?

A process for paying off multiple high-interest debts using a lower-interest loan
A process, often offered by nonprofit organizations, where a credit counselor helps you to develop a budget and work with your lenders to pay off your debts
A process where a lender accepts one large payment, typically 10 to 50 percent of your total loan balance, in exchange for forgiving your debt
A federal legal process that allows individuals or businesses to have their debts forgiven while providing some repayment to their lenders

Which of the following are questions you should ask before signing up for a debt settlement program?

Are you an IAPDA-certified debt consultant?
Are you being paid a commission?
Are you licensed to do business in my state?
Can you tell me exactly how long this will take and exactly how much this will cost?
Will you be making monthly payments to my creditors?
Can I get sued?
When will I hear from you next?

What is Bankruptcy?

A process, often offered by nonprofit organizations, where a credit counselor helps you to develop a budget and work with your lenders to pay off your debts
A process where a lender accepts one large payment, typically 10 to 50 percent of your total loan balance, in exchange for forgiving your debt
A federal legal process that allows individuals or businesses to have their debts forgiven while providing some repayment to their lenders
None of the above

Which of the following are questions you should ask before hiring a bankruptcy attorney?

Chapter 7 or Chapter 13?
Can you afford it?
Will it actually help?
Can you qualify for bankruptcy?
Will you be able to live with the effects for years to come?

Digging Out Of Debt Final Exam

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