Question

The client announces that she plans to file for bankruptcy. Which is the first recommendation a

counselor should make to the client?

A- Contact at least three debt management companies for assistance with resolving the bad debt.
B- Wait several years for the bad debt to be removed from the credit report.
C- Contact at least three bankruptcy attorneys and choose the one with the lowest fee.
D- Adjust the budget to find residual income, then negotiate settlements with creditors one at a time.

Answer 1

The first recommendation a counselor should make to a client planning to file for bankruptcy is to adjust their budget and find residual income to negotiate settlements with creditors one at a time.

Step-by-step explanation:

The first recommendation a counselor should make to a client who plans to file for bankruptcy is option D - Adjust the budget to find residual income, then negotiate settlements with creditors one at a time.

By adjusting the budget to find residual income, the client can determine how much money is left after paying for basic needs. This residual income can then be used to negotiate settlements with creditors, allowing the client to repay a portion of their debt and avoid bankruptcy.

Negotiating settlements with creditors one at a time is a more proactive approach that may help the client avoid the negative consequences of bankruptcy, such as damage to their credit score and future financial difficulties.