NACCC CFC test prep

How do counselors convey genuineness?

Congruence (counselor's statements and actions reflect how they truly feel, no mixed messages) Openness to self-disclosure (and answering personal questions directly and briefly) Immediacy (spontaneous communication) Avoid hesitancy, inconsistency, and defensiveness Comfortable expressing personality with clients

How can Maslow's Hierarchy of Needs be used to gain insight into a client's spending habits?

Counselor can use it to determine client's motivation for spending, consumption patterns, and to help client differentiate between needs and wants

The three "A"s of money relationships

Money and achievement (people work hard and want something to show for it, which may translate into purchasing high-ticket items) Money and approval (make money to seek acceptance by and belong to social groups; keeping up with the joneses) Money and agitation (spend money to alleviate stress, feel better about themselves, or out of spite

Four ways to boost client's self-efficacy

Monitor progress: e.g. acknowledgement of small wins to boost client confidence to tackle larger problems Inspire by example: "seeing is believing and believing is what self-efficacy is all about"; e.g. share examples of yourself and others who overcame obstacles and resolved problems to inspire client Encourage and challenge: "you can do it" leads to "I can do it"; help client identify self-defeating beliefs and challenge them, then replace them with notion that desired outcomes are possible and realistic Help clients overcome anxiety: fear of failure can lead to non-action; identify w/ client by listening and acknowledging fears, then help dispel them with practical, reliable info

Common mortgage workout agreements

"cure" a default by adding a percentage of the outstanding debt (the arrears) to the regular monthly payments until the debt becomes current recast the outstanding debt: homeowner can make monthly payments but cannot make up past-due installments, so arrears are deferred or recast so that they no longer represent a present obligation request temporary or permanent interest rate reduction or a temporary moratorium on mortgage payments, depending on the situation

Net worth

Assets minus liabilities

Non-installment credit

...

Five stages of counseling

1. Rapport and relationship building 2. Assess and define the problem/gather info 3. Goal setting 4. Strategy implementation 5. Follow-up

Common barriers to communication

Anxiety and self-centeredness Needless interruption Hidden agenda Overreacting to emotional words Passing judgement Stereotyping

The five things good interviewers do

Ask short, direct questions Ask one question at a time Ask questions that do not require an explanation Wait for clients to respond to questions Do not answer their own questions

Subjective measures of financial health

A sense of fulfillment A sense of happiness Peace of mind

Back-end ratio

A type of debt/income ratio that takes all debts into account divided by monthly gross income

Front-end ratio

A type of debt/income ratio that takes only monthly mortgage (PITI) or rent payment divided by gross monthly income; also known as the housing ratio

Unsubsidized loan characteristics

Accrues interest during the grace period ...

List ways counselors can improve communication with their clients

Adopt an accepting attitude Express clearly Listen for the total meaning Be physically attentive Observe non-verbal communication Share responsibility for the communication Be expressive, be yourself Be assertive, not aggressive Avoid "you should" messages (can use "I" messages instead) Show empathy

Explain how counselors show positive regard to their clients

Affirmation Remain non-judgemental Respect Acceptance Tend to client through verbal/non-verbal behaviors (smiling, expressing interest, relaxed posture, good eye contact, soft/soothing tone of voice, enhancing statements [focus on the positive], provide encouragement and support)

How does non-reflective listening help client/counselor communication?

Affirms client verbally in a non-judgemental way, which encourages client to continue communicating by helping them relax and feel assured that what they have to say is essential for the counselor to hear

According to the Business/Human model, what do clients need at the human level?

Attention Courteous treatment Respect Acceptance

Steps of natural problem solving process

Awareness of the problem (client realizes they are in an unhealthy financial situation) Problem creates urgency (client begins to feel sense of urgency about problem as consequences of problem surface) The search begins (client searches for a solution/explores their options) Decisions, decisions (client weighs consequences of various actions) What if I did nothing? (client considers what would happen if they just ignored the problem) I have made a decision! (client has intellectually decided to do something, but has not pursued it yet) "C" is for committment (now the client's heart is in it, too, and with head and heart involved, client pursues their decision)

Life-cycle planning

Career planning Savings planning Retirement planning Debt planning Insurance planning Investment planning Estate planning (after death, e.g. will, tax planning)

List the four specific techniques used during reflective listening

Clarifying Paraphrasing Summarizing Reflecting feelings

Three examples of close-ended questions

Do you pay your bills? Are you working right now? Do you want to improve your credit score?

Subsidized loan characteristics

Does not accrue interest during the grace period Cannot be discharged through bankruptcy ...

Diffusion

Counters cognitive fusion, a means to untangle ourselves from our thoughts Ways to practice diffusion: just notice the thought, and call it out bully response: treat the thought as if it were a bully and stand up to it thank your mind with sarcasm: employ sarcasm in thanking your mind for some self-injurious thought it's pushing repeat the thought: minimize and desensitize yourself to a thought by repeating it out loud, using funny voices, or even singing about it to lessen its sting driving the bus: your thoughts are loud, obnoxious passengers on a bus who, while they cannot be kicked off the bus, will be dropped off at their stops because you are still the driver of the bus leaves on stream: take a negative thought and imagine placing it on a leaf that is floating downstream; watch until it is out of sight write them down/containerize them: write down an unhealthy thought (or any persistent thought that is proving an obstacle) and use a container (notebook, sticky notes and bin) to hold it for safe-keeping to build trust with your mind cards: write unhealthy thought down on small card, carry it with you and occasionally look at it to remind yourself you are in control of it worry time: set aside time each day to face and address negative thoughts: e.g. coffee at 9am with five minutes to acknowledge that you feel pathetic sometimes, followed by five minutes of positive affirmations; eventually, you will no longer need the 9am appointment

3 Habit loop components

Cue Routine Reward

Rotter's locus of control

Determines to large extent how clients view positive/negative circumstances in their lives; informs their belief about what they can and cannot do, their designated responsibilities, and their willingness to act Internal: client takes more personal responsibility, sees their role in their circumstances; an internal locus of control fosters responsibility and engenders self-efficacy, so it should be encouraged in clients External: client takes less personal responsibility, does not easily see their role in their circumstances, may blame others; e.g. "the bank documentation was wordy and confusing, and nobody explained it to me, so I didn't understand what I was signing"

Effective goal setting includes the following

Developing a thorough action plan ...

Explain how effective counselors establish trust with their clients

Empathy Genuineness Positive regard Counselor communicates to client that they have their best interest in mind Counselor demonstrates expertise and knowledge necessary to help with client's dilemma

Important aspects of financial "success"

Financial success is defined as obtaining maximum benefits from existing financial resources What is considered financial success can be different based on multiple variables, including one's background, country of residence, social circle, age, and more Related goals shift and evolve throughout the lifespan

Types of expenses

Fixed: e.g. mortgage payment Variable: e.g. utilities Periodic: irregular or large-impact payments, e.g. car maintenance Discretionary: e.g. entertainment

Three steps to decision-making

Gather info: what's the problem, what needs work, what could be improved Process info: client analyzes and processes the problem; they will do this according to their own values, beliefs, feelings, and attitudes; some clients will try to skip this stage entirely and jump to a decision Choose and execute: point of commitment to act; important that client decides and acts according to their values and counselor helps client clarify those values; counselor also helps client develop a bias towards action versus doing nothing

Define active listening

Giving client undivided attention Showing respect Demonstrating interest Meet human needs of client Being attentive Listening well What you do, what you say, what you observe

Bandura's self-efficacy

I believe I can do something because I have the skills and resources to achieve it Client may need help building self-efficacy: e.g. they want a better paying job, but lack interviewing skills; help them get connected to resources to practice interviewing to build their self-efficacy around that and the hiring process in general

What are some of the specific concerns clients bring to counseling?

Improve credit (score, access, etc) Resolve marital conflicts over money Avoid bankruptcy Deal with creditors Cut expenses Increase income etc.

Meyers-Briggs :: Perceiving (P) type

Improvises and adapts easily ... I(ntrover) - E(xtrovert) N(intuitive) - S(ensing) T(hinking) - F(eeling) J(udging) - P(erceiving)

The Problem-Management/Opportunity-Development Model

It is client-centered (counselors act to facilitate and support client-directed outcomes) It is an open-systems model (use any methodology that works to serve the client, not one size fits all; if it works, do it, if it doesn't, leave it and try something else) It specifically compliments financial problem-solving (clients come with negative debt/income ratio; this is resolved through reducing expenses ["managing the pain"] and increasing income [developing opportunities])

The big three financial goals

Paying for education Buying a home Planning/saving for retirement

Natural problem solving process

People are naturally inclined to resolve problems in their lives

Obstacles to initiating action

Not having an action plan States of inertia Barriers to positive change Client not feeling accountability Client lack of motivation Client's self-defeating behaviors Client's underlying belief-systems Client's sense of powerlessness

Steps in the foreclosure process

Notice of default Notice of acceleration Notice of sale ?

Process of foreclosure

Notice of default (one or two mortgage payments, or 60-90 days, of missed payments, now person has 90 days to "cure" the debt by making payment plus all fees) Notice of acceleration (person did not respond to notice of default, and now everything is due immediately) Notice of foreclosure (may receive a summons to respond) Notice of sale (did not respond to summons or any prior notice, and now the notice of sale gives the time and date that foreclosure will take place) Whole process can take 6-18 months to complete

Albert Bandura's willingness to take action

Outcome expectations: the client believes that the action will result in the desired outcome, e.g. a client believes that maintaining a budget is crucial to controlling spending Self-efficacy expectations: the client must believe that they can successfully engage in the necessary behavior to achieve the desired outcome, and thus an action will occur; e.g. the client is reasonably sure they can do what it takes to resolve outstanding debt: consistent payments, increasing income, cutting expenses, and creating the necessary conditions to do those things If either of these conditions is missing, client inertia will set in.

Maslow's hierarchy applied to spending

Physiological: food, water, air; e.g. does client engage in frugal grocery shopping or dining out? do they consume water out of the tap or purchase bottled water? Safety: need to feel secure; e.g. does client have modest or luxury housing, spend on guns, or own a particular vehicle because it's "safer"? Love, affection, belonging: e.g. buying to fit among and be accepted by a particular group of people or to elicit love or affection; may include what kind of housing, vehicle, clothing, and other items a person buys, as well as expensive gifting to others or subjecting themselves to treatments that they believe positively impact their appearance (plastic surgery, botox, salon sessions) Esteem: gaining self-esteem and earning respect from others; e.g. client purchases items to make them feel better about themselves or project a certain image, including expensive watches or designer clothing and bags Self-actualization: realize one's own true potential; easier to spot client spending related to this when they are struggling at this level, e.g. they don't believe they are realizing their full potential and are spending accordingly to fill a void or out of restlessness/edginess/tension on things including diversionary items to escape

Objective measures of financial health

Positive debt/income ratio Adequate insurance Steady and adequate salary Adequate savings for emergencies Adequate savings for retirement Good credit rating Adequate cash flow to meet everyday expenses Established and utilized spending plan etc.

Describe how process goals differ from outcome goals

Process goals are the domain of the counselor and have to do with how the client experiences the counseling. These work to create trust, respect, and rapport. Outcome goals are the domain of the client and have to do with the goals the client sets for themselves, such as improving their credit score.

Saving

Putting money aside for future needs

Why are threats by creditors to seize property rarely carried out?

Requires a court decision in unsecured-debt cases Can be expensive for the creditor litigation is costly and time-consuming workouts can be made with lenders debtors may be convinced to settle with creditors because of sentimental value of items resale value of items seized may not justify expense of seizing them

Locke and Latham's key aspects of goal-setting

Set short and long-term goals: they feed off each other (short-term goals add up to the long-term objective, while the long-term goal gives short-term goals meaning) Participative goal-setting: client should take an active role in setting goals, while counselor should facilitate the goal-setting instead of making suggestions; client will be more likely to commit to and achieve stated goals Feedback: keeps client on track

Name the five types of communication

Social Persuasive Non-verbal Expressive Cognitive

Four steps of planning

State goals in specific terms Create a plan for how to achieve each goal Evaluate progress towards the goal Decide whether to keep working towards the goal or focus on a new one

Types of spenders

The fanatical shopper (bargain hunter to the extreme) The impulsive buyer (lack of control, no shopping plan) The passive buyer (pushover, easily persuaded to buy things they don't want or need and then blame others, generally don't like to shop, put little time and effort into it) The ulterior motive spender (shops as a means of escape, to deal with stress/difficult feelings, as a form of revenge, or to gain approval) The esteem spender (keeping up with the joneses, shops in prestige stores and to impress others) The special interest spender (spends on a hobby, collection, or activity that eats up a lot of income; may also be addicted to gambling or drugs, or a habitual drinker; they could be bored or have a need to be unique) The hot potato spender (they procrastinate, worry about making new and unfamiliar purchases, then buy at the last minute to put an end to the ordeal quickly; in the end, what they buy is probably far from what they needed)

Difference between chapter 7 and 13 bankruptcy

chapter 13: stop foreclosure protect non-exempt property debt-problem involves co-signers and you want to protect them debts from a divorce-decree are owed must wait two years before filing another one, or four years if you've previously filed a chapter 7 debtor repays all or a portion of what is owed over a five year period payments begin within 30 days of the filing case can be modified at any time you want to do the "right thing" chapter 7: have to take a means test relief needed from debts that cannot be paid get rid of high medical bills must wait 8 years before filing another one, or six years if you've previously filed a chapter 13 sometimes referred to as a "liquidation" bankruptcy complete credit counseling within 180 days of the filing debtor education within 45 days of the creditors' meeting

Types of spending

compulsive spending: overcome emptiness by binge shopping/frivolous spending codependent spending: create dependency in others by showering them with perceived necessities narcissistic spending: overcome feelings of inferiority by spending to establish a certain image revenge spending: one person exacts punishment on another by spending their money

The three elements of outcome goals

They are specific: e.g. identify which expenses are to be cut, not just "cut all expenses" They are measurable: e.g. cutting expenses by a specific percentage over a particular period of time They are viable: e.g. realistic

Mandatory forbearance criteria

This is a type of forbearance that you can enroll in under these conditions: you are participating in a medical or dental internship or residency and you meet the requirements defined by that program, your monthly payments are more than twenty percent of your total monthly gross income, you are a recipient of a national service award and are serving in a national service position, you're eligible for teacher loan forgiveness, you're eligible for a partial repayment of your loan thanks to the US Department of Defense student loan repayment program, or you're a member of the National Guard who has been called up, but you don't qualify for military deferment.

Liquidity ratio

Total cash/liquid assets divided by total monthly expenses; meant to show how many months a person could meet their expenses in the event of losing their income

Suggest ways counselors can increase empathy within the counseling relationship

Understand effects of counseling on clients Increase awareness and sensitivity of client cultural differences (demographic, status, ethnographic, economic) Gain understanding of themselves among diverse groups

How do counselors physically demonstrate interest and caring?

Upright, relaxed posture Eye contact Appropriate facial expressions Non-verbal feedback

Spending percentage guidelines

Used in budgeting to determine whether someone is spending within an acceptable range within any particular category. For instance, that a person should target no more than 25-35% of their income spent on rent, 5-15% on food, 5-10% on utilities, and save 5-15%.

The exception question

Used in solution-focused therapy to help clients remember times when they haven't had their current problems; what was different about those times, their situation, or their behavior that allowed for things to be okay back then?

What do counselors observe about client messages?

What clients say How clients say what they say

Three examples of open-ended questions

What feelings come up for you when you think about money? How is your work life? What differences exist between you and your partner when it comes to finances?

What are the three components of active listening?

What you do What you say What you observe

Problem solving through counseling

Where is the client now? (identify the current situation: gather facts, income, expenses, debt levels; counselor establishes trust, asks close-ended questions, uses non-reflective listening techniques) Where does the client want to go? (setting goals: set achievable objectives, put into place whatever is necessary to accomplish those goals; client/counselor team is proactive, not reactive) How will the client reach stated goals? (work on getting there: time to act; brainstorm for options, evaluate each option, act on the best one; come up with a plan that works)

Pre-discharge debtor education

must take place within 45 days of creditors' meeting and include: budget development money management using credit wisely consumer information

Depository Institutions Deregulation and Monetary Control Act of 1980

national banks could now charge interest rates based on laws of states where they were based, instead of laws of states where consumers are based; effectively made predatory lending more pervasive

Predatory lending

a number of practices to exploit consumers legal but high-cost loans deceptive sales practices exploiting a consumer's ability/inability to repay interest rates and fees well in-excess of compensating for risk or earning reasonable profit frequent refinancing ability to pay is disregarded payment history is not reported balloon mortgages exorbitant fees examples: payday loans, car title loans, tax refund anticipation loans

The miracle question

a solution-focused technique that asks clients to imagine how their life would be different if they woke up tomorrow and they no longer had their problem; once there, work with the client to understand what they could have done to create this new scenario, and how does the client act within the miracle scenario?

How to communicate with collectors

prevent harassment before it begins: don't ignore an unpaid bill, speak with the creditor and explain, work something reasonable out request termination of contact: once account is with a collections agency, send a letter requesting that all contact cease; this may result in collector sending a final notice outlining further action to be taken dispute all billing errors: consumers have 60 days to dispute any errors on their bills in letter form; creditor must respond within 30 days with some explanation of the charge; consumer cannot be reported as delinquent during this process until dispute is settled, although the creditor can continue to add finance charges on the amount; dispute must be resolved within two billing cycles or no later than 90 days dispute the debt: a collection agency must send written statement of nature of debt and consumer's right to dispute the debt within five days of initial contact; consumer must respond immediately and challenge any mistaken debt/charges correspond in writing and keep records: communicate everything by letter and maintain copies; use registered or certified mail for documentation purposes do not succumb to scare tactics: never let threats mar judgement over financial decisions; knowledge of consumer rights mitigates fear

Economizing

allocating spending for the maximum benefit of everyone in the household

Four components of debt counseling in the case of bankruptcy

analysis of the client's current financial condition discussion of the factors that caused the current condition discussion of alternatives to address the current situation, e.g. consumer workout, credit counseling, debt consolidation, chapter 13, debt settlement, chapter 7 development of an action plan, e.g. goal, actions needed, when, obstacles, resources

Three needs for self-determination

autonomy competence relatedness

Types of self-help debt-repayments

avalanche approach: line up credit cards by interest charged, with client paying off highest rate card first, then the next, then the next snowball approach: client pays off lowest balance card first, then the next, then the next the painful method: client reviews debt and focuses on card that is causing the most pain, then concentrate their repayment efforts on that account; payments towards that account increase as minimum payments drop on other cards 0% balance transfer method: client takes advantage of a balance transfer offer

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

bankruptcy filers now seen as abusing the system unless they prove otherwise makes it harder to file for bankruptcy limits eligibility for chapter 7 diminishes benefits of chapter 13 increases the paperwork and cost of filing

Albert Ellis

believed thoughts come before emotions in decision-making; therefore, if the thinking is corrected, the emotion is controlled e.g. I must have this or I must buy that, tiny voices that drive behavior; this can be counteracted by addressing "irrational musts," using rational coping and self-statements, take the bad with the good, and never underestimate the power of distraction

Signs of problem gambling

borrowing money to gamble gambling to avoid difficult feelings hiding gambling activities neglecting responsibilities to gamble deriving intense pleasure/excitement from gambling continuing to gamble despite negative consequences ...

Types of debt collectors

credit grantors: collections department at original creditor institution (e.g. VISA's collections department); reserves right to legal action so long as they continue to own the debt and haven't sold it to a collections agency collection agencies: outside agency that assumes responsibility for collecting unpaid debt, act on commission basis and charge fees; have a right to sue for the amount of the debt if they've purchased the debt from the original creditor attorneys: delinquent account may be referred to an attorney when collection agency has been unsuccessful; usually only done when amount of debt is substantial given high attorney fees; can initiate legal action against debtor, which results in a summons being served upon the debtor

Prevalent reasons for indebtedness

easy access to credit easy access to money consumer culture changing technology lack of financial literacy financial setbacks spending too much lack of benefits planning

Solution-focused approach (SFA) to counseling

espouses the optimistic notion that change is a natural, everyday process; people are not destined to be stuck in a rut SFA is not therapy, it is assisting client discover and activate their strengths and resources SFA is goal-oriented: once those are identified, along with the barriers to them, it is now a matter of removing the barriers SFA highlights client strengths rather than their weaknesses; the counseling session is positive and self-affirming for the client SFA focuses on the future, not on the past, or mistakes, or patterns of self-deception SFA is used in the present moment as a springboard to discover and actualize a positive future

Post-bankruptcy steps

get credit report and fix any errors apply for a secured credit card apply for an installment loan

Daily expense record

record and track everyday expenses by listing exact amounts for each item at point of purchase

Benefits of miracle/exception questions

help clients explore what they want to be different in their lives help clients identify strengths and resources to make these desired differences a reality situate the desired future squarely in the present moment

Four benefits of creating a spending plan

identify overspending promote honest interpersonal communication and accountability (e.g. it helps as an objective starting point for addressing difficulties within families and relationships around spending/financial matters) increase motivation (e.g. is part of creating a tangible goal and leading the way there) track success (e.g. is a tool to monitor success on the path towards goals)

Steps of solution-focused approach

identify problem address emotional impact brainstorm solutions prioritize solutions choose a solution commit to the solution/take action

Reframing

involves a change in perception that activates possibilities by taking a situation out of its former context and placing it in a new one that offers a positive outcome; e.g. a layoff is an opportunity to up-skill

Notice to quit (notice to vacate)

notice a renter receives from landlord as a first step in eviction process

Types of debtors in terms of how they handle debt (from Anselm Bassano)

panickers: fail to prioritize debts properly and regularly borrow more to pay off existing debt mourners: initially in denial, they then blame creditors for their problems in their anger rationalists: do it the right way by ranking importance of different debt and negotiating payment plans based on available resources fraudsters: set out to abuse system with no intention of paying back what was lent to them

Components of FICO credit score

payment history - 35% amounts owed - 30% length of credit history - 15% credit mix - 10% new credit - 10%

Four key skills of emotional intelligence

personal competence: self-awareness self-management social competence: social awareness relationship management

Maslow's hierarchy of needs

physiological, safety, love/belonging, esteem, self-actualization

Dr. Russ Harris :: cognitive fusion

thoughts fuse themselves in our minds: "fusion with a thought can seem like the absolute truth, a command you have to obey or a rule you have to follow"; we become attached to, and are affected by, our thoughts these thoughts can often be negative in nature, as those can be the loudest in our minds, and seriously impact our ability to make good decisions; this necessitates the need for us to get them under control

Consumer options to resolve debt

workouts bankruptcy debt-consolidation loans like home equity loans or 0% transfers credit counseling (may involve debt-management plan) debt settlement (may involve negotiated lump-sum payment) budget counseling self-help debt-repayment

Fair Debt Collection Practices Act

restricts what collection agencies may do to recover debt; they may not: give misleading or false info about debt to others call before 8am or after 9pm in debtor's timezone interrupt debtor's work routine make excessive calls to debtor at home or work as form of harassment send any letter made to look like an official government document threaten debtor or family member in a physical manner imply that debtor's property may be physically damaged deposit a post-dated check before the date written on the check misrepresent themselves as a government agency or law office continue to harass debtor after being notified in writing to cease contact also outlines what collection agencies may do to recover debt; they may: call between the hours of 8am and 9pm in the debtor's timezone ask for personal information, though the debtor may choose not to provide it explain in normal tones legal action that they can undertake to recover debt, and the consequences of a judgement in their favor identify themselves and the reason for their call attempt to motivate debtor by offering incentives for partial or full repayment of debt file proof of claim and request a meeting with a debtor (in this case, debtor can redeem secured merchandise by paying market value as determined by the court to the creditor ask debtor to renegotiate a new note, though debtor does not have to comply file a creditor's claim against the estate in the event the debtor is deceased ask permission to contact debtor at work or wherever they may be at the time if they are not at home; permission must be given by person answering the phone at the residence

What can unsecured debt collectors do to recover debt?

revoke credit privileges damage credit rating of debtor sue debtor to collect the debt

Possible actions by creditors who have won court judgements against debtors

seize property wage garnishments judgement liens bank account seizures

What debts cannot be discharged through chapter 7 bankruptcy?

student loans child support payments tax debts debt obligations that creditors object to being discharged (e.g. debts that were incurred through fraud or malicious acts)

Types of economizing

substituting: replacing a more expensive item with a like item of similar quality at a lower price, e.g. an off-brand item conserving: take care of your stuff to extend its life, e.g. perform needed maintenance of possessions for everything from laundry to vehicle cooperating: trade home-repair skills with friends and neighbors, help each other, barter, etc. utilizing community resources: libraries, local assistance w/ energy costs, government discount programs, public transit

Cultural encapsulation

term coined by Gilbert Wrenn (1962) to describe insensitivity to cultural differences

Deficiency balance

the difference between the amount a repossession can be sold for and what the person owes on the property repossessed, e.g. if a person owes $14k on a car but it gets repossessed and sold for $10k, the person owes $4k

Types of delinquent debtors (from Kevin Keleghan)

the imprudent: no money put away, paycheck to paycheck the naive: no sense of consequences of unpaid debt, if they ignore it, it will go away fortune's victim: in debt because of a catastrophic life event the reckless spender: spend more than they have, impulse buying, spending for the wrong reasons the unethical: borrow credit with no intention of repaying anything the impoverished: high-risk consumers who make daily purchases with credit that they were granted by accident or through predatory practices