Collections & Recovery Strategies Flashcards
7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Collections & Recovery Strategies flashcards as text
Which collections model uses statistical scoring to prioritize which accounts to work first?
Answer: Propensity-to-pay scoring model
Propensity-to-pay models assign scores based on historical behavior, allowing collectors to focus on accounts most likely to pay.
A debtor's account has been charged off. What does this mean from the original creditor's accounting perspective?
Answer: The balance is written off as a loss on the books but the debt still legally exists
Charge-off is an accounting entry removing the receivable from active assets; the debt legally remains collectible.
The 'mini-Miranda' warning required by the FDCPA must be included in:
Answer: All communications with the consumer
The mini-Miranda disclosure — that the communication is from a debt collector attempting to collect a debt — is required in every communication.
Which bankruptcy chapter is most commonly filed by individual consumers seeking to discharge unsecured debt?
Answer: Chapter 7
Chapter 7 is a liquidation bankruptcy that allows eligible individuals to discharge most unsecured debts quickly.
When a collections account is reported to a credit bureau, the FCRA requires that negative information be removed after:
Answer: 7 years from the date of first delinquency
The FCRA mandates that most negative information, including collection accounts, be removed 7 years from the original delinquency date.
In a contingency-fee collections arrangement, the collection agency is compensated by:
Answer: A percentage of the amount actually recovered
Contingency-fee agencies earn a pre-agreed percentage (e.g., 20–35%) only on amounts they successfully collect.
Which type of lien gives a creditor a security interest in a debtor's real property as a result of an unpaid court judgment?
Answer: Judgment lien
A judgment lien attaches to a debtor's real property automatically upon recording the judgment in the county where property is located.