COPYRIGHTED MATERIAL
RESOLVING INSOLVENCY
C H A P T E R 18
Learning Goals By the end of this chapter you will be able to: • Define insolvency • Explain two ways in which bankruptcy laws benefit the U.S. economy • Compare bankruptcy chapters 7, 11 and 13 • List five types of property exempt from the claims of creditors • List five types of debt that cannot be eliminated in bankruptcy • Summarize how a debt management program operates • (Opt.) Reflect on financial literacy by selecting three aspects of this course which, in their opinion, are most critical to building wealth and financial security in the 21st century
T PRODUCT PREVIEW
I n the last chapter, you were asked to ponder how, in the old days when someone couldn’t pay their debts, they could be sent to debtor’s prison or forced into indentured servitude until the creditor was repaid. Others could be forced to sell off everything and were left penniless and destitute. Imagine if we tossed people who couldn’t pay their loans or other debts into prison, or forced them into service? What would be the impact on business? Would you risk starting a business if you could go to prison if it failed? Would you risk buying something on credit if your inability to repay it meant being left penniless and forced to live on the street? Thankfully, times have changed! This chapter continues with the theme of preserving and protecting wealth. Businesses and individuals who cannot pay their debts and meet their financial obligations are insolvent . Let's explore how a debtor can protect some of their assets, wealth, and dignity in the face of insolvency!
Chapter Resources: The Federal Trade Commission (FTC) is the U.S. consumer protection agency. The FTC works to prevent fraudulent, deceptive and unfair business practices. The FTC website has a lot of excellent resources for consumers, including scam alerts and tips for managing debt. www.consumer.ftc.gov
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