PCS Payment Negotiation & Settlement 2

Question 1

A debtor offers a lump-sum settlement of 40% of the balance. Before accepting, what should a collector verify first?

Accepted Answer

Authorization from the creditor client to settle at that percentage

Answer

Collectors must have explicit client authorization for any settlement percentage before accepting or promising acceptance.

Question 2

Which negotiation technique involves stating the full balance first before discussing any payment options?

Accepted Answer

Anchoring

Answer

Anchoring sets the full balance as the reference point, making partial payments or settlements appear more favorable by comparison.

Question 3

A debtor proposes monthly payments but the amount offered won't satisfy the debt within the statute of limitations. What is the best collector response?

Accepted Answer

Counteroffer with a higher monthly payment or a lump-sum settlement

Answer

A counteroffer addressing the timeline concern is more productive than outright rejection and keeps negotiation moving toward resolution.

Question 4

Under the FDCPA, a collector who agrees to a payment arrangement must:

Accepted Answer

Honor the agreed terms and not pursue further collection action while the debtor complies

Answer

Once a payment arrangement is agreed upon, the collector must honor it and refrain from additional collection pressure as long as the debtor complies.

Question 5

What is a 'hardship program' in the context of debt collection?

Accepted Answer

A reduced payment or interest waiver offered to debtors experiencing financial difficulty

Answer

Hardship programs allow creditors or collectors to temporarily reduce required payments or waive fees for debtors facing documented financial difficulties.

(PCS) Professional Collection Specialist Practice Test

(PCS) Professional Collection Specialist Practice Test

PCS Payment Negotiation & Settlement 2