1 / 14

Laws Protecting Debtors/Creditors and Bankruptcy

Laws Protecting Debtors/Creditors and Bankruptcy. Unit C Basic Business Law Objective 6.02. Laws Protecting Debtors. Setting maximum interest rates Usually apply to loans of money Some states govern charges imposed on credit purchases of goods/services “on time”. Laws Protecting Debtors.

khoi
Download Presentation

Laws Protecting Debtors/Creditors and Bankruptcy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Laws Protecting Debtors/Creditors and Bankruptcy Unit C Basic Business Law Objective 6.02

  2. Laws Protecting Debtors • Setting maximum interest rates • Usually apply to loans of money • Some states govern charges imposed on credit purchases of goods/services “on time”

  3. Laws Protecting Debtors • Disclosure of Terms • Full disclosure of interest and finance charges • Does not limit percentage amount • True annual percentage rate (APR) • Does not apply to first mortgages

  4. Laws Protecting Debtors • Challenging Unconscionable Contracts • Unfair and oppressive • Judge decides if conscionable • Refuse to enforce contract • Remove unfair clause and enforce contract • Limit clause’s application so no longer unfair

  5. Laws Protecting Debtors • Prohibiting Abuse in the Credit System • Federal Equal Credit Opportunity Act • May not refuse due to sex or marital status • May not ask marital status if applying for unsecured separate account • May not prohibit a married female from opening/maintaining account in maiden name • May not request information about birth control practices or intentions • Married persons with joint accounts have right to have credit information reported in both names

  6. Laws Protecting Debtors • Federal Fair Debt Collection Practices Act • Prohibits: • Harassment of debtors • Abusive and profane language • Threats of violence • Contract with 3rd parties • Communication with the debtor at work

  7. Laws Protecting Debtors • Federal Fair Credit Billing Act • Creditors must mail bills at least 14 days before due date • Creditors must acknowledge billing inquiries within 30 days • Creditors must settle complaints within 90 days • Creditors may not send repeated letters demanding payment until disputes over billing are settled • Credit cardholders may withhold payment for items defective without being liable for entire amount owed (purchases of $50 or more and 100 miles from home)

  8. Laws Protecting Debtors • Federal Fair Credit Reporting Act • Deals with unfavorable credit reports • Have right to correct report • Credit Repair Organization Act • Governs companies that help consumers correct credit reports

  9. Laws Protecting Debtors • Notice of debt payment to be recorded • Request receipt • Canceled checks • Types of Bankruptcy • Chapter 7 • Chapter 11 • Chapter 13 • Chapter 12

  10. Bankruptcy • Chapter 7 – Liquidation • Sale of nonexempt property for cash • Nonexempt property • Bank Accounts • Stocks • Bonds

  11. Chapter 7 Bankruptcy Procedure • File the following with the court: • List of all creditors and amounts owed • List of all property owned • Statement about financial affairs • List of current income and expenses • Trustee is selected • Assets liquidated • Proceeds used to pay creditors • Money left over returned to debtor

  12. Bankruptcy • Chapter 11 Reorganization • Business can keep operating • Files plan of reorganization • Court approves plan

  13. Bankruptcy • Chapter 12 • Used for Family Farmers wishing to make a debt adjustment to save the business • Debt Ceiling $1.5 million • Debt plan is for 3 years with a possibility of a 2 year extension

  14. Bankruptcy • Chapter 13 Extended Time Payment Plan • Applies to individuals with regular income • Unsecured debts less than $250,000 and/or secured debts of less than $750,000 • Submit plan for repayment of debts within three years • May be extended to five years • Creditors cannot file suit

More Related