Assets - Every form of
property owned by a debtor.
Automatic Stay - A stay
imposed by the court when a bankruptcy is
filed that prevents creditors from taking
collection actions against the debtor.
Bankruptcy - When a
debtor who owes more than his or her
assets relieves the debts by transferring
his or her assets to a trustee and is
relieved of the future obligation to repay
unsecured debts.
Chapter 7 - This is a
type of bankruptcy in which a debtor's
assets are liquidated to satisfy credit
obligations, which are removed at the
completion of bankruptcy.
Chapter 13 - This type of
bankruptcy allows a person to retain
assets in exchange for making reduced
payments in accordance to a
trustee-approved plan.
Collateral - An item of
value that guarantees payment of debt or
may be collected in place of payment.
Collection Agency - A
third party agency creditors use to
collect debt. Sometimes a collection
agency is a company set up by the creditor
to collect debt. Also called a Credit
Agency.
Consumer Report - Also
called a "credit report," a factual record
of an individual's credit payment history.
Its main purpose is to help a lender
quickly and objectively decide whether to
give the consumer credit. A credit report
is used to develop a credit score, but
does not contain the score itself.
Consumer Reporting Agencies (CRA)
- Companies that gather and sell
information about where a consumer works
and lives, how they pay their bills, and
whether they've been sued, arrested, or
filed for bankruptcy. The most common type
of CRA is a credit bureau. The information
CRAs sell about the consumer to creditors,
employers, insurers, and other businesses
is called a Consumer Report or a Credit
Report.
Cosigner - A person who
officially undertakes responsibility for a
loan in the event of the borrower's
default.
Credit Agency - A third
party agency creditors use to collect
debt. Sometimes a credit agency is a
company set up by the creditor to collect
debt. Also called a Collection Agency.
Credit Bureaus - Private,
for-profit companies that gather
information about a consumer's credit
history and sell it to banks, credit card
companies, landlords, employers, and other
interested parties.
Credit Counseling Service
- Companies that provide debt management
plans and budget counseling, usually in
return for fees.
Credit History - A record
based on information supplied over time by
creditors with whom consumers have done
business. This information is reflected in
a credit report.
Creditor - A person or
business who extends credit and to whom
money is owed.
Credit Report - Also
called a Consumer Report, a factual record
of an individual's credit payment history.
Its main purpose is to help a lender
quickly and objectively decide whether to
grant a consumer credit. A credit report
is used to develop a consumer's credit
score, but does not contain the score
itself.
Credit Score - Credit
scores provide a numerical representation
of a consumer's credit at a given point in
time. Credit scores are calculated using
data contained in a consumer's credit
report. The score assesses the likelihood
that a borrower will repay a loan or
credit card
Debt Load - The total
amount of money the consumer owes.
Debt Management Plan - A
plan that helps consumers repay their
debts and helps creditors collect the
money owed them. Usually put together by a
Credit Counseling Agency.
Debtor - Someone who uses
credit cards, owes money on a personal
loan, or is paying on a home mortgage.
Debt Collector - Someone
who regularly collects debts owed to
others. This includes attorneys who
collect debts on a regular basis.
Default - Occurs when a
borrower fails to repay a debt obligation
in accordance with its terms.
Dischargeable Debt - A
debt that can be eliminated in bankruptcy.
Exemptions - Property
that is legally beyond the reach of
creditors or a trustee.
Interest - The percentage
a creditor charges on money borrowed.
Loan - An arrangement
whereby a creditor gives a company or an
individual money and arranges for them to
pay it back on a timeline, usually with
interest.
Non-dischargeable Debt -
A debt that cannot be eliminated in
bankruptcy.
Petition - The document
that initiates a bankruptcy case.
Secured Credit Cards -
Cards provided after a consumer deposits
funds into an account. Charges may only be
made up to the amount deposited.
Secured Debt - Debts
linked to collateral. The collateral
guarantees payment of the debit, or the
creditor has a right to take the
collateral. Secured debt is most commonly
used when purchasing homes or cars.
Trustee - A trustee is
appointed in Chapter 7 and Chapter 13
bankruptcy cases to review the debtor's
schedules, manage payments, and generally
represent the interests of the creditors
in the bankruptcy case. The role of the
trustee is different under different
bankruptcy chapters.
Unsecured Debt - Debts
with no collateral. Commonly used with
credit cards, doctors' bills, student
loans, personal loans or rent.
