Bankruptcy – Recap

Bellwork• What is the difference between chapter 7 and chapter

13 bankruptcy?• What are 3 consequences of bankruptcy?

• Standard 1.2 and 1.3 Quiz Tomorrow– Impact of advertising– Bankruptcy

• Consequences• What is it?• Law changes• Chapter 7 vs. chapter 13• Factors that lead to bankruptcy (safe limits)

The United States Courts website offers several videos on the bankruptcy process. Click on the screen to go to their site.

http://www.uscourts.gov/Multimedia/Videos.aspx?video_url=http://www.uscourts.gov/video/source/BankruptcyBasics/bankruptcy-eng_2-types_low.f4v&video_image=/uscourts/video/BankruptcyBasics/images/preview2.jpg&video_id=bb2

Are Julee and Jimmy in Trouble? You usually can afford a maximum monthlky rent or

mortgage payment of 25-28% of your monthly gross (before tax) income. (If you are a homeowner, this percentage includes your principal and interest mortgage payment, real estate taxes and insurance)

Your rent or mortgage payment plus other monthly debt payments should not exceed 36% of your gross

monthly income (this means that your other monthly debt payments, including credit cards, should be about 8% of your monthly gross income.

Emergency savings = 3-6 months of your expenses

TIPS TO REMEMBER

6

•Keep track of your daily expenses.•Save money on a regular basis.•Make changes right away if you see yourself starting to get into financial trouble.•Pay attention to your household finances,

especially if you are married.