CCP Collections & Recovery Strategies 3

Question 1

Which collections model uses statistical scoring to prioritize which accounts to work first?

Accepted Answer

Propensity-to-pay scoring model

Answer

Propensity-to-pay models assign scores based on historical behavior, allowing collectors to focus on accounts most likely to pay.

Question 2

A debtor's account has been charged off. What does this mean from the original creditor's accounting perspective?

Accepted Answer

The balance is written off as a loss on the books but the debt still legally exists

Answer

Charge-off is an accounting entry removing the receivable from active assets; the debt legally remains collectible.

Question 3

The 'mini-Miranda' warning required by the FDCPA must be included in:

Accepted Answer

All communications with the consumer

Answer

The mini-Miranda disclosure — that the communication is from a debt collector attempting to collect a debt — is required in every communication.

Question 4

Which bankruptcy chapter is most commonly filed by individual consumers seeking to discharge unsecured debt?

Accepted Answer

Chapter 7

Answer

Chapter 7 is a liquidation bankruptcy that allows eligible individuals to discharge most unsecured debts quickly.

Question 5

When a collections account is reported to a credit bureau, the FCRA requires that negative information be removed after:

Accepted Answer

7 years from the date of first delinquency

Answer

The FCRA mandates that most negative information, including collection accounts, be removed 7 years from the original delinquency date.

(CCP) Certified Credit Professional Practice Test