ADRA Applied Knowledge & Practice 5

Question 1

A client with $40,000 in unsecured debt can only deposit $150 per month. What is the most responsible action?

Accepted Answer

Evaluate whether the program is realistic and discuss alternatives such as bankruptcy consultation or credit counseling

Answer

Suitability requires confirming the client can realistically complete the program, otherwise alternatives should be discussed.

Question 2

In Chapter 13 bankruptcy, a repayment plan typically lasts how long?

Accepted Answer

3 to 5 years

Answer

Chapter 13 plans usually run three to five years depending on income relative to the state median.

Question 3

Which statement about the FDCPA debt validation process is accurate?

Accepted Answer

Consumers have 30 days after receiving the validation notice to dispute the debt in writing

Answer

Under the FDCPA, consumers have 30 days from receiving the validation notice to dispute the debt.

Question 4

A company tells prospects it will 'repair your credit and remove negative items' for an upfront fee. Which law is most directly implicated?

Accepted Answer

Credit Repair Organizations Act

Answer

CROA prohibits advance fees for credit repair services and misleading claims about removing accurate negative information.

Question 5

A settlement agreement is reached for a 24-month installment plan with the creditor. What should the agent confirm before advising the client to accept?

Accepted Answer

That the client's dedicated account funding can cover each installment and that the terms are documented in writing

Answer

Clients should have written settlement terms and sufficient projected funds to meet every scheduled payment.

ADRA - Accredited Debt Relief Agent Practice Test

ADRA - Accredited Debt Relief Agent Practice Test

ADRA Applied Knowledge & Practice 5