CBS Post-Bankruptcy Recovery Planning 2 — Questions and Answers
Question 1: After receiving a Chapter 7 discharge, how long must a debtor wait before filing another Chapter 7 case?
- 4 years
- 6 years
- 8 years (Correct answer)
- 10 years
Correct answer: 8 years
Under 11 U.S.C. § 727(a)(8), a debtor must wait 8 years from the prior Chapter 7 filing date before receiving another Chapter 7 discharge.
Question 2: Which credit bureau reporting rule governs how long a Chapter 7 bankruptcy remains on a consumer's credit report?
- Fair Credit Billing Act (FCBA)
- Fair Credit Reporting Act (FCRA) (Correct answer)
- Truth in Lending Act (TILA)
- Equal Credit Opportunity Act (ECOA)
Correct answer: Fair Credit Reporting Act (FCRA)
The FCRA limits Chapter 7 bankruptcy reporting to 10 years from the filing date, while Chapter 13 is limited to 7 years.
Question 3: A debtor who completed Chapter 13 wants to build credit. Which secured product is typically the most accessible immediately post-bankruptcy?
- Unsecured personal loan
- Secured credit card (Correct answer)
- Home equity line of credit
- Auto lease with no money down
Correct answer: Secured credit card
Secured credit cards require a cash deposit as collateral, making them accessible to post-bankruptcy debtors who would be declined for unsecured products.
Question 4: Which of the following post-discharge debts is most likely to be reported positively to credit bureaus and help rebuild credit?
- Discharged credit card balance
- New secured auto loan with on-time payments (Correct answer)
- Medical bill sent to collections
- Student loan in deferment
Correct answer: New secured auto loan with on-time payments
A new secured auto loan with timely payments creates a positive payment history that credit bureaus report favorably, directly rebuilding credit scores.
Question 5: A post-bankruptcy client receives pre-approved credit card offers with very high interest rates. What term describes this predatory lending practice targeting financially vulnerable consumers?
- Redlining
- Subprime solicitation
- Risk-based pricing (Correct answer)
- Creditor cramdown
Correct answer: Risk-based pricing
Risk-based pricing refers to charging higher interest rates based on a borrower's perceived credit risk, which post-bankruptcy debtors often face.
Question 6: Which financial tool allows a post-bankruptcy debtor to report rent payments to credit bureaus to accelerate credit rebuilding?
- Debt consolidation loan
- Rent reporting service (Correct answer)
- Balance transfer card
- Credit-builder CD
Correct answer: Rent reporting service
Rent reporting services like RentTrack or Rental Kharma report on-time rental payments to credit bureaus, adding positive tradelines for post-bankruptcy consumers.
Question 7: After a Chapter 7 discharge, a debtor wants to purchase a home. What is the typical FHA loan waiting period from the discharge date?
- 1 year
- 2 years (Correct answer)
- 3 years
- 4 years
Correct answer: 2 years
FHA guidelines generally require a 2-year waiting period after Chapter 7 discharge before a borrower qualifies for an FHA-insured mortgage.
CBS Post-Bankruptcy Recovery Planning 2
After receiving a Chapter 7 discharge, how long must a debtor wait before filing another Chapter 7 case?