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Basics Beginner: Managing Your Debt

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1.
If you file for bankruptcy, the bankruptcy will stay on your credit record for _______ years.
Choose wisely. There is only one correct answer.
10. After 10 years, it will disappear.
2.
If you are in debt, why is it important to first deal with the causes of the debt?
Choose wisely. There is only one correct answer.
It can prevent them from recurring. Though not guaranteed to, there is a good chance you can prevent future occurrences.
3.
Your recurring monthly debt payments (such as credit cards) should be considered _______ in your budget.
Choose wisely. There is only one correct answer.
Ghosts of prior expenses. Although you may pay them every month, they are not current expenses. They are remnants of past expenses that you must pay off over time.
4.
Which of the following are ways to lower your monthly debt payments?
Choose wisely. There is only one correct answer.
All of the above. These are all ways to reduce your monthly debt payments.
5.
Debt is always a bad thing.
Choose wisely. There is only one correct answer.
False. Provided we use it wisely and pay it back, debt can provide us with many much-needed things, including assets that can rise in value.
6.
Which of the following would most likely give you additional tax savings on your loan interest?
Choose wisely. There is only one correct answer.
Home equity loan. Interest on home equity loans may be tax deductible.
7.
Making a plan to eliminate your debt begins with _______.
Choose wisely. There is only one correct answer.
Setting a target date. Setting a target date will help you determine how much to pay toward the debt each month.
8.
A good way to reduce your monthly debt payments is to pay only the minimum amount due on credit card statements.
Choose wisely. There is only one correct answer.
False. Paying the minimum amount due on credit card statements will only increase the time and money paid on a debt.