Collection Strategies & Risk Assessment Flashcards

Under Regulation F, a debt collector is presumed to violate call-frequency limits when it calls a consumer about a particular debt more than how many times within seven consecutive days?

Answer: Seven

Reg F presumes a violation when calls exceed seven within seven days or occur within seven days after a telephone conversation.

What generally happens to collection activity when a debtor files bankruptcy?

Answer: The automatic stay halts most collection actions

The automatic stay under 11 U.S.C. §362 stops most collection efforts once a petition is filed.

Payments a creditor received from an insolvent debtor within how many days before a bankruptcy filing may be recovered as preferential transfers (for non-insiders)?

Answer: 90 days

The trustee may avoid preferential payments to non-insider creditors made within 90 days before filing.

A debt is past the statute of limitations. Under Regulation F, what is a debt collector prohibited from doing?

Answer: Suing or threatening to sue on the time-barred debt

Reg F §1006.26(b) bars collectors from suing or threatening suit on time-barred debt.

Which document best reduces risk when extending credit to a thinly capitalized small corporation?

Answer: A personal guarantee from the principal

A personal guarantee gives the creditor recourse to the owner's personal assets if the business defaults.

To perfect a security interest in a customer's inventory, a creditor typically files which document?

Answer: UCC-1 financing statement

Filing a UCC-1 with the appropriate state office perfects most security interests in personal property.

When should an account generally be referred to a third-party collection agency?

Answer: When internal efforts are exhausted or the debtor stops responding

Agency placement is appropriate once internal efforts fail, since recovery odds drop as accounts age.