Understanding Different Types of Consumer Loans and Debt Reorganization, Slides of Management Fundamentals

Download Understanding Different Types of Consumer Loans and Debt Reorganization and more Slides Management Fundamentals in PDF only on Docsity! Chapter 11: Debt Reorganization ¢ Not very common because it is intended for businesses. ° Is viable if you exceed the liability limits of Chapter 13. ¢ Allows your creditors to vote on the repayment plan. Docsity.com Chapter 7: Straight Bankruptcy  • Provides the opportunity to eliminate most of your  debts and begin again.  • Requires the liquidation of most of your assets by a  court appointed trustee.  • Allows you to keep some equity in your house, but  the amount varies by state.  • Should only be considered after you consult with a  financial advisor and a lawyer.  Docsity.com Summary (cont’d)  • Loan costs vary with the methods of  computing finance charges  • Sources of consumer loans—know the costs  • Four ways to reduce your interest rate  – use a variable‐rate loan  – keep loan term short  – provide collateral  – make a large down payment    Docsity.com Summary (cont’d) ¢ Determine how much debt you can afford — review your budget — analyze debt commitments — calculate your financial ratios — apply the debt resolution rule ¢ Seek help if you get into trouble ® Docsity.com