CRPA CRPA Collections & Debt Recovery 2

Question 1

A payment arrangement plan is negotiated with a delinquent debtor. Which element is most critical to include in the written agreement?

Accepted Answer

Specific payment amounts, due dates, and consequences of default

Answer

A valid payment arrangement agreement must clearly state the scheduled amounts, due dates, and what happens if the debtor defaults to be legally enforceable.

Question 2

What is the primary purpose of a dunning process in accounts receivable?

Accepted Answer

To systematically send escalating communications to delinquent customers

Answer

Dunning is the structured process of sending progressively firm reminders and notices to customers with overdue balances to prompt payment.

Question 3

Under U.S. bankruptcy law, when a customer files Chapter 7 bankruptcy, what typically happens to unsecured trade receivables?

Accepted Answer

They are discharged, and the creditor receives little or no recovery

Answer

In Chapter 7 liquidation, unsecured trade creditors are low-priority and typically receive little or no recovery after secured creditors and administrative expenses are paid.

Question 4

A receivables manager wants to reduce the cost of collections while maintaining recovery rates. Which approach is most effective?

Accepted Answer

Implementing automated early-stage outreach for low-risk, low-balance accounts

Answer

Automating low-risk, low-balance outreach frees skilled collectors to focus on high-value or complex accounts, reducing cost per dollar collected.

Question 5

What does the term 'right-party contact' mean in debt collection?

Accepted Answer

Verifying that the person being contacted is the actual account holder or authorized representative

Answer

Right-party contact ensures collectors are speaking with the actual debtor or an authorized party, not a third party, which is critical for FDCPA compliance.

CRPA - Certified Receivables Professional Practice Test

CRPA - Certified Receivables Professional Practice Test

CRPA CRPA Collections & Debt Recovery 2