Introducing
Your new presentation assistant.
Refine, enhance, and tailor your content, source relevant images, and edit visuals quicker than ever before.
Trending searches
Garnished - When a certain amount of money can be taken out of a borrower's wages.
Bankrupt - When a person is judged by the court to be insolvent, e.g. unable to pay debts.
Credit Bureau - An organization that keeps on file the credit records of consumers.
Creditor - A person who is owed money
Debtor - A person who owes money.
Default notice - A document from a lender stating that a person has failed to carry out the terms of the contract.
If you manage your finances poorly you may find you:
- Are bankrupt
- Cannot afford luxury items
- Have to sacrifice things in order to be able to afford essentials.
Financial Consequences
Why is it difficult to manage finances?
People can find it difficult to manage their finances if:
- They don't have a budget
- Don't keep a record of purchases
- They spend more than the are making.
- When taking out a loan it is sometimes necessary to mortgage goods if the lender wants security.
- If you do not have enough money to pay back the loan you can be deemed bankrupt.
- If you do not pay back this loan the lender will repossess the good provided during the loan.
- In addition to the repossession you may have to pay the price of the repossession to the lender.
Legal
Consequences
- Any money you owe is a debt, the person owes the money is called a debtor, the person who is owed money is called a creditor.
- As a debtor you have liabilities or obligations to the creditor which must be fulfilled.
- Failure to do so will result in the creditor taking legal action against you to recover their money.
Problems caused by poor financial management
Types of Consequences
- Legal
- Financial
- Social
Important Words to know:
Credit Bureau and Financial Counselor
Mortgage: I put down a hundred thousand dollars in cash a took out a mortgage for the rest.
Mortgagee: The bank became our mortgagee when it accepted our mortgage on our new home.
Mortgagor: We became mortgagors when the bank accepted our mortgage and loaned us money.
Repossession: The bank repossessed our car when we couldn't pay back our debt.
Interesting Video:
Credit Bureau: an organization that is responsible for keeping files on the credit records of customers. It also helps its members to decide whether to accept or reject credit applications.
Financial Counselor: they are voluntary organizations that aim to assist people in managing their finances, they offer free advice on dealing with financial issues.