Strategic Planning & Analysis Flashcards

A client earns $4,000 gross monthly and pays $1,800 in monthly debt payments. What is the client's debt-to-income (DTI) ratio?

Answer: 45%

DTI is monthly debt payments divided by gross monthly income: $1,800 / $4,000 = 45%.

When building a debt settlement plan, which factor most directly determines how long the client's program will last?

Answer: The monthly deposit amount relative to estimated settlement totals

Program length depends on how quickly monthly deposits accumulate enough to fund the projected settlements.

A client has $30,000 in unsecured debt and can save $500 per month. If settlements average 50% of balance plus 20% fees on enrolled debt, roughly how many months are needed to fund everything?

Answer: 42 months

Settlements ($15,000) plus fees ($6,000) total $21,000, which at $500 per month takes 42 months.

Which client profile is generally the WEAKEST candidate for debt settlement?

Answer: A client with mostly federal student loans and a mortgage

Federal student loans and secured mortgage debt are not typically eligible for unsecured debt settlement programs.

In a strategic intake analysis, why is documenting a client's financial hardship important?

Answer: Creditors are more likely to accept reduced settlements when genuine hardship exists

Documented hardship supports the case to creditors that a reduced payoff is the best recovery option.

A client's monthly budget shows a $150 surplus after essentials. What is the best strategic conclusion?

Answer: The client may not sustain the program; reassess deposit level or alternatives

A thin surplus signals high dropout risk, so deposit affordability or alternative solutions should be reviewed.

Which metric best helps an agent compare debt settlement against a debt management plan (DMP) for a specific client?

Answer: Total projected cost and time to become debt-free under each option

Comparing total cost and duration under each option shows which is more suitable for the client.