Negotiation & Settlement Strategies Flashcards
7 cards from real CARS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Negotiation & Settlement Strategies flashcards as text
When a debtor claims financial hardship and cannot pay the full balance, what should an asset recovery specialist do first?
Answer: Assess the debtor's ability to pay and explore reduced settlement options
Assessing the debtor's financial situation enables the specialist to develop a realistic solution that maximizes recovery given the actual circumstances.
Which of the following is a key advantage of a structured payment plan compared to a lump-sum settlement?
Answer: It typically results in higher total dollar recovery over time
A structured payment plan can yield higher total recovery since the debtor pays more over time, though it carries non-payment risk and takes longer to complete.
A promissory note in the context of asset recovery serves primarily as:
Answer: A written promise to repay a debt under specified terms
A promissory note is a legally binding written promise by the debtor to repay money under agreed conditions, creating an enforceable obligation.
Under which circumstances should litigation be considered as a strategy in asset recovery?
Answer: When voluntary resolution has failed and the debt amount justifies the legal costs
Litigation should be considered only after negotiation efforts are exhausted and a cost-benefit analysis confirms the potential recovery justifies the expense.
The FDCPA requires collectors to provide a 'Mini-Miranda' warning in collection communications. What must this warning convey?
Answer: That the communication is from a debt collector attempting to collect a debt
The Mini-Miranda disclosure is a federally mandated statement informing debtors that the communication is from a debt collector attempting to collect a debt.
In negotiation, communicating 'without prejudice' means that:
Answer: Statements made cannot be used as admissions in later legal proceedings
'Without prejudice' protects settlement discussions by preventing statements from being used as admissions in litigation if negotiations ultimately fail.
What is the primary risk of accepting a partial payment from a debtor without a formal written settlement agreement in place?
Answer: The debtor may later claim the partial payment fully satisfied the entire debt
Without a written agreement specifying the partial payment's purpose, a debtor may argue it was accepted as full satisfaction, potentially barring further collection.