ADRA Debt Relief Programs & Consumer Options

Question 1

Which type of bankruptcy allows an individual to keep certain exempt assets while having most unsecured debts discharged?

Accepted Answer

Chapter 7

Answer

Chapter 11

Answer

Chapter 13

Answer

Chapter 9

Question 2

A Debt Management Plan (DMP) is typically administered by which type of organization?

Accepted Answer

A nonprofit credit counseling agency

Answer

A for-profit debt settlement company

Answer

The creditor directly

Answer

A federal government agency

Question 3

What is the typical timeframe for completing a Chapter 13 bankruptcy repayment plan?

Accepted Answer

3 to 5 years

Answer

6 to 12 months

Answer

1 to 2 years

Answer

7 to 10 years

Question 4

Debt consolidation loans are BEST suited for clients who:

Accepted Answer

Have stable income and credit scores that qualify for a lower interest rate than existing debts

Answer

Have severely damaged credit scores below 580

Answer

Are already in collections on all accounts

Answer

Cannot afford minimum payments on any account

Question 5

Which debt relief option typically has the MOST negative short-term impact on a client's credit score?

Accepted Answer

Debt settlement / negotiating a lump-sum payoff for less than owed

Answer

Enrolling in a Debt Management Plan

Answer

Obtaining a debt consolidation loan

Answer

Making consistent minimum payments

Question 6

Under the CARD Act of 2009, credit card issuers are required to apply payments above the minimum to:

Accepted Answer

The balance with the highest interest rate first

Answer

The balance with the lowest interest rate first

Answer

Equally across all balances

Answer

The newest purchase balance first

Question 7

Which of the following is a key eligibility requirement to file Chapter 7 bankruptcy?

Accepted Answer

The debtor must pass the means test showing income below a threshold

Answer

The debtor must owe at least $10,000 in unsecured debt

Answer

The debtor must have attempted a DMP first

Answer

The debtor must be employed at the time of filing