FiCEP - Financial Counseling Certification Program Handling Financial Difficulties Questions and Answers

Question 1

A client, an active-duty servicemember, is struggling with a high-interest auto loan that was taken out two years before they entered the military.
Under the Servicemembers Civil Relief Act (SCRA), what specific protection are they entitled to regarding this pre-service debt?

Accepted Answer

The interest rate on the loan can be reduced to a maximum of 6%.

Answer

The debt is placed into a temporary deferment until their service ends.

Answer

The creditor must forgive any interest accrued during their active-duty period.

Answer

The principal balance of the loan is reduced by a federally mandated percentage.

Question 2

A client's car was repossessed due to missed payments. The client wants to know what their rights are regarding the vehicle and their belongings inside. Which of the following statements is the most accurate?

Accepted Answer

The lender must provide written notice of the sale and an opportunity for the client to redeem the vehicle.

Answer

The lender can sell the car immediately to the highest bidder without notifying the client.

Answer

The lender is entitled to keep any personal property left inside the vehicle.

Answer

The client automatically loses any right to get the car back once it is repossessed.

Question 3

A client is in a crisis situation with an overdue mortgage, a utility shut-off notice for their heat in the winter, and a maxed-out credit card. From a financial counseling perspective, which issue should be addressed with the highest priority?

Accepted Answer

Addressing the utility shut-off to ensure essential services are maintained.

Answer

Negotiating a settlement with the credit card company.

Answer

Creating a detailed, long-term budget for the next five years.

Answer

Immediately filing for Chapter 7 bankruptcy to discharge the debts.

Question 4

A client is 90 days delinquent on their mortgage and has received a notice of intent to accelerate from their lender. To avoid foreclosure, what is the MOST common initial loss mitigation option the client should explore with their mortgage servicer?

Accepted Answer

A forbearance plan.

Answer

A short sale of the property.

Answer

A deed-in-lieu of foreclosure.

Answer

Refinancing the mortgage with a new lender.

Question 5

When comparing a Debt Management Plan (DMP) with debt settlement, what is a key disadvantage a counselor should explain is unique to debt settlement?

Accepted Answer

It requires the consumer to stop paying creditors, severely damaging their credit score.

Answer

It involves making a consolidated monthly payment to a third-party agency.

Answer

Creditors may offer concessions such as reduced interest rates.

Answer

It can typically be completed within three to five years.

Question 6

A client receives a notice that their electricity will be shut off for non-payment. A member of their household relies on an electrically powered medical device. Which of the following would most likely provide protection against immediate disconnection?

Accepted Answer

Providing the utility company with a certification from a physician.

Answer

The client's income falling below the federal poverty line.

Answer

Having children under the age of 18 living in the home.

Answer

The outside temperature being forecast to drop below freezing.

A client, an active-duty servicemember, is struggling with a high-interest auto loan that was taken out two years *before* they entered the military.Under the Servicemembers Civil Relief Act (SCRA), what specific protection are they entitled to regarding this pre-service debt?

A client, an active-duty servicemember, is struggling with a high-interest auto loan that was taken out two years before they entered the military.
Under the Servicemembers Civil Relief Act (SCRA), what specific protection are they entitled to regarding this pre-service debt?