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ADRA Financial Analysis & Debt Assessment Flashcards

6 cards from real ADRA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 ADRA Financial Analysis & Debt Assessment flashcards as text

  1. Which ratio is calculated by dividing total monthly debt payments by gross monthly income?

    Answer: Debt-to-income ratio

    The debt-to-income (DTI) ratio is calculated as total monthly debt payments divided by gross monthly income and is the primary metric lenders and debt agents use to assess debt burden.

  2. What is the main purpose of conducting a 'hardship analysis' as part of the ADRA debt assessment process?

    Answer: To document the circumstances that led to the client's financial difficulties and support enrollment in relief programs

    A hardship analysis documents life events (job loss, medical crisis, divorce) that caused financial difficulty, which supports qualifying clients for debt settlement or relief programs.

  3. When reviewing a client's credit report, which section would reveal accounts that have been sent to third-party collections?

    Answer: Collections or derogatory marks section

    The collections or derogatory marks section of a credit report lists accounts that creditors have referred to collection agencies due to non-payment.

  4. A client owns a home valued at $300,000 with a $280,000 mortgage balance. What is the client's home equity?

    Answer: $20,000

    Home equity equals the property's market value minus the outstanding mortgage balance: $300,000 − $280,000 = $20,000.

  5. Under what circumstance would an ADRA agent recommend a client seek credit counseling rather than debt settlement?

    Answer: When the client has steady income and can repay the full debt with reduced interest under a DMP

    Credit counseling and a Debt Management Plan (DMP) are appropriate when a client has sufficient income to repay debts in full but needs reduced interest rates and a structured plan.

  6. What is the significance of the statute of limitations on debt in the context of a financial assessment?

    Answer: It determines how long a creditor can legally sue to collect the debt

    The statute of limitations establishes the time window in which a creditor can file a lawsuit to collect a debt, which varies by state and debt type.

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Sources & references

Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy

  1. fid.nv.gov — Eligibility · verified Oct 2026
  2. iapda.org — Passing score, retake policy, fees, renewal · verified Oct 2026