FiCEP Handling Financial Difficulties 5

Question 1

A client calls a debt collector and verbally requests they stop contacting them. Under the FDCPA, what must the collector do?

Accepted Answer

Cease contact only after receiving a written cease-and-desist letter

Answer

Under the FDCPA, a cease-and-desist must be in writing to legally obligate a collector to stop contact; a verbal request alone is not sufficient.

Question 2

Which of the following debts CANNOT be discharged in a Chapter 7 bankruptcy?

Accepted Answer

Federal student loans (in most cases)

Answer

Federal student loans are generally non-dischargeable in bankruptcy unless the debtor proves undue hardship through an adversary proceeding.

Question 3

A financial counselor is working with a client who has a wage garnishment for a defaulted credit card debt. Which strategy could IMMEDIATELY stop the garnishment?

Accepted Answer

Filing for bankruptcy protection

Answer

Filing for bankruptcy triggers an automatic stay that immediately halts most collection actions including wage garnishments.

Question 4

What is the primary purpose of the automatic stay in bankruptcy proceedings?

Accepted Answer

To temporarily halt all collection actions against the debtor

Answer

The automatic stay immediately halts most collection efforts, lawsuits, foreclosures, and repossessions when a bankruptcy petition is filed.

Question 5

A client with a secured auto loan is 60 days delinquent. The lender repossesses the vehicle and sells it for $8,000, but the outstanding loan balance was $12,000. What is the $4,000 difference called?

Accepted Answer

Deficiency balance

Answer

A deficiency balance is the amount still owed to the lender after a repossessed asset is sold for less than the outstanding loan balance.

FiCEP - Financial Counseling Certification Program Practice Test

FiCEP - Financial Counseling Certification Program Practice Test

FiCEP Handling Financial Difficulties 5