FREE AFC Credit and Debt Management Questions and Answers

Question 1

A client with a steady income wants to protect their home from foreclosure and catch up on missed mortgage payments.
They have significant unsecured debt but also valuable assets they wish to keep.
Which form of bankruptcy would an AFC® most likely explain as a potential option for this client?

Accepted Answer

Chapter 13 Bankruptcy

Answer

Chapter 11 Bankruptcy

Answer

Chapter 7 Bankruptcy

Answer

Chapter 12 Bankruptcy

Question 2

Under the Fair Credit Reporting Act (FCRA), a consumer has the right to dispute inaccurate information on their credit report. Once a dispute is filed with a consumer reporting agency, what is the agency's primary responsibility?

Accepted Answer

To conduct a reasonable investigation of the disputed information.

Answer

To immediately remove the disputed item from the report.

Answer

To contact the consumer's other creditors to verify the dispute.

Answer

To charge the consumer a fee to launch a formal inquiry.

Question 3

A financial counselor is helping a client choose a debt repayment strategy. The client feels overwhelmed and needs to see progress quickly to stay motivated. Which of the following methods would be most appropriate to recommend for this client's psychological needs?

Accepted Answer

Debt Snowball Method

Answer

Debt Avalanche Method

Answer

Debt Consolidation Loan

Answer

Debt Settlement Program

Question 4

A client is applying for a mortgage. The lender calculates their front-end debt-to-income (DTI) ratio. Which of the following costs is included in the front-end DTI calculation?

Accepted Answer

Proposed principal, interest, taxes, and insurance (PITI)

Answer

Monthly student loan payment

Answer

Total credit card minimum payments

Answer

Monthly car loan payment

Question 5

Which of the following is a key feature of Chapter 7 bankruptcy, also known as liquidation bankruptcy?

Accepted Answer

It allows for the sale of non-exempt assets to pay back creditors.

Answer

It involves a 3-to-5 year court-approved repayment plan.

Answer

It is primarily designed for family farmers and fishermen.

Answer

It protects all of the debtor's assets from being sold.

Question 6

A client wants to implement the Debt Avalanche strategy to pay off their various debts. To do this correctly, how should the client prioritize their extra payments?

Accepted Answer

From the debt with the highest interest rate to the lowest.

Answer

From the newest debt to the oldest debt.

Answer

From the debt with the lowest balance to the highest balance.

Answer

From the debt with the largest balance to the smallest balance.

A client with a steady income wants to protect their home from foreclosure and catch up on missed mortgage payments.They have significant unsecured debt but also valuable assets they wish to keep.Which form of bankruptcy would an AFC® most likely explain as a potential option for this client?

A client with a steady income wants to protect their home from foreclosure and catch up on missed mortgage payments.
They have significant unsecured debt but also valuable assets they wish to keep.
Which form of bankruptcy would an AFC® most likely explain as a potential option for this client?