ADRA ADRA Financial Analysis & Debt Assessment

Question 1

What is the debt-to-income (DTI) ratio threshold commonly used to identify a client as financially distressed and eligible for debt relief services?

Accepted Answer

Above 43%

Answer

Above 20%

Answer

Above 10%

Answer

Above 35%

Question 2

Which financial statement is most useful when a debt relief agent needs to assess a client's ability to make ongoing monthly payments toward a settlement plan?

Accepted Answer

Monthly cash flow statement

Answer

Balance sheet

Answer

Income tax return

Answer

Net worth statement

Question 3

When calculating a client's total unsecured debt load, which of the following should be EXCLUDED?

Accepted Answer

Home mortgage balance

Answer

Credit card balances

Answer

Medical bills

Answer

Personal loan balances

Question 4

A client has $45,000 in unsecured debt and $1,800 in monthly disposable income. Approximately how many months would a full repayment plan take with no interest?

Accepted Answer

25 months

Answer

15 months

Answer

45 months

Answer

60 months

Question 5

Which metric best measures the proportion of a client's assets that could be liquidated to cover outstanding debts?

Accepted Answer

Liquidity ratio

Answer

Leverage ratio

Answer

Coverage ratio

Answer

Profitability ratio

Question 6

When prioritizing which debts a client should address first in a debt relief plan, which category typically takes highest priority?

Accepted Answer

Secured debts and priority obligations like taxes and child support

Answer

Unsecured credit card debt

Answer

Store credit accounts

Answer

Medical bills