CCDS CCDS Negotiation & Collection Practices 2

Question 1

What is 'wage garnishment' in the context of debt collection?

Accepted Answer

A court-ordered withholding of a portion of a debtor's wages to satisfy a debt

Answer

Wage garnishment is a legal process whereby a creditor with a court judgment can direct an employer to withhold part of the debtor's wages.

Question 2

Which of the following best describes the 'debt avalanche' repayment method?

Accepted Answer

Paying the debt with the highest interest rate first to minimize total interest

Answer

The debt avalanche method prioritizes paying the highest-interest debt first, minimizing the total interest paid over time.

Question 3

Under the FDCPA, which of the following is a prohibited debt collection practice?

Accepted Answer

Threatening to take legal action the collector cannot or does not intend to take

Answer

The FDCPA prohibits collectors from making false threats of legal action that they have no intention or legal ability to carry out.

Question 4

What is the primary role of a CCDS-certified specialist when negotiating with creditors on behalf of a client?

Accepted Answer

To advocate for the client's financial interests within ethical and legal boundaries

Answer

A CCDS specialist advocates ethically for clients, helping negotiate with creditors while remaining within legal and professional boundaries.

Question 5

What is a 'judgment lien' in debt collection?

Accepted Answer

A lien placed on a debtor's property after a court judgment in favor of the creditor

Answer

A judgment lien results from a court ruling in the creditor's favor, allowing them to attach the lien to the debtor's real property.

CCDS - Certified Consumer Debt Specialist Practice Test