FiCEP Fundamentals 4

Question 1

A client receives a lump-sum inheritance. According to sound financial counseling principles, what should they do first?

Accepted Answer

Assess their overall financial situation and goals before acting

Answer

A holistic financial review before acting on a windfall ensures the funds align with the client's short- and long-term goals.

Question 2

What is the primary distinction between Chapter 7 and Chapter 13 bankruptcy?

Accepted Answer

Chapter 7 liquidates assets; Chapter 13 creates a repayment plan

Answer

Chapter 7 involves liquidating non-exempt assets to pay creditors, while Chapter 13 establishes a 3–5 year repayment plan.

Question 3

Which factor has the greatest impact on a FICO credit score?

Accepted Answer

Payment history

Answer

Payment history accounts for 35% of a FICO score, making it the single most influential factor.

Question 4

What is 'predatory lending' in the context of consumer financial protection?

Accepted Answer

Lending practices that impose unfair or abusive loan terms on borrowers

Answer

Predatory lending involves deceptive, manipulative, or exploitative loan terms that harm consumers financially.

Question 5

A counselor uses motivational interviewing techniques. What is the core purpose of this approach?

Accepted Answer

To elicit the client's own motivation to change financial behaviors

Answer

Motivational interviewing is a client-centered counseling style that draws out intrinsic motivation to support behavior change.

FiCEP - Financial Counseling Certification Program Practice Test