Title: Compare the types of voluntary and involuntary bankruptcy and the implications of each.
Course: Economics and Personal Finance (19262-I) > Section: Demonstrating Knowledge of Credit and Loan Functions

Comparison should include

- the major causes of personal bankruptcy, such as small-business failure, impulse or emotional spending, failure to plan and budget, illness or injury, external factors (e.g., pandemic)
- evaluation of the terms of voluntary and involuntary bankruptcy and the effect each has on an individual’s financial future
- explanation of the advantages and disadvantages of bankruptcy
- assessment of the need for legal advice in bankruptcy cases
- identification of bankruptcy laws and their implications for personal finance
- identifying what is not dismissed in bankruptcy (e.g., student loans, child support, taxes).
- defining the most common chapters of bankruptcy
  - Chapter 7—liquidation of assets to pay debts, does not involve the filing of a plan of repayment
  - Chapter 13—reorganization bankruptcy, includes a court ordered plan to repay debt in three to five years
  - Chapter 11—business reorganization bankruptcy; if a business goes bankrupt, secured creditors get paid first (i.e., before employees).