CCDS Consumer Bankruptcy & Debt Settlement Flashcards
6 cards from real CCDS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CCDS Consumer Bankruptcy & Debt Settlement flashcards as text
Under Chapter 7 bankruptcy in the U.S., what is the typical timeframe for receiving a discharge of eligible debts?
Answer: 3 to 6 months
Chapter 7 bankruptcy typically results in a discharge of eligible unsecured debts within 3 to 6 months of filing.
Which type of bankruptcy allows individuals with regular income to repay debts over a 3- to 5-year plan?
Answer: Chapter 13
Chapter 13 bankruptcy enables individuals with regular income to propose a repayment plan lasting 3 to 5 years.
What is the 'means test' in Chapter 7 bankruptcy primarily used to determine?
Answer: Whether the debtor qualifies based on income
The means test compares the debtor's income to the state median to determine eligibility for Chapter 7.
Which of the following debts is generally NON-dischargeable in bankruptcy?
Answer: Federal student loans
Federal student loans are generally non-dischargeable in bankruptcy unless the debtor proves undue hardship.
In a debt settlement arrangement, what typically happens to the forgiven portion of the debt?
Answer: It may be treated as taxable income by the IRS
The IRS generally treats forgiven debt as taxable income, and creditors must issue a 1099-C for amounts of $600 or more.
What is the automatic stay in bankruptcy proceedings?
Answer: An immediate halt to most collection actions upon filing
The automatic stay immediately stops most collection actions, lawsuits, and foreclosures upon the filing of a bankruptcy petition.