Glossary Of Terms
Bankruptcy - A legal proceeding that relieves you of the responsibility of paying your debts or provides you with protection while attempting to repay your debts. There are two types of bankruptcies -- liquidation, in which your debts are wiped out (discharged) and reorganization, in which you provide the court with a plan for how you intend to repay your debts. Read more...
Collateral - Property that guarantees payment of a secured debt. Read more...
Collection Agency - A company hired by a creditor to collect a debt that it is owed. Read more...
Contract - A legally binding agreement involving two or more people or businesses (called parties) that sets forth what the parties will or will not do. Read more...
Cosigner - A person who signs his or her name to a loan agreement, lease or credit application. If the primary debtor does not pay, the cosigner is fully responsible for the loan or debt. Read more...
Credit Bureau - A private, profit-making company that collects and sells information about a person's credit history. Read more...
Credit Reports - Credit history or credit report is, in many countries, a record of an individual's or company's past borrowing and repaying. Read more...
Creditor - A person or entity (such as a bank) to whom a debt is owed. Read more...
Debtor - A person or entity (such as a bank) who owes money. Read more...
Default - A failure to perform a legal duty. For example, a default on a mortgage or car loan happens when you fail to make the loan payments on time, fail to maintain adequate insurance or violate some other provision of the agreement. Read more...
Discharge (of debts) - A bankruptcy court's erasure of the debts of a person or business that has filed for bankruptcy. Read more...
Dischargeable Debts - Debts that can be erased by going through bankruptcy. Read more...
Down Payment - A lump sum cash payment paid by a buyer when he or she purchases a major piece of property, such as a car or house. Read more...
Foreclosure - The forced sale of real estate to pay off a loan on which the owner of the property has defaulted. Read more...
Garnishment - A court-ordered process that takes property from a person to satisfy a debt. Read more...
Grace Period - A period of time during which you are not required to make payments on a debt. Read more...
Guarantor - A person who makes a legally binding promise to either pay another person's debt or perform another person's duty if that person defaults or fails to perform. Read more...
Interest - A commission you pay a bank or other creditor for lending you money or extending you credit. Read more...
Lien - The right of a secured creditor to grab a specific item of property if you don't pay a debt. Read more...
Loan Consolidation - The combining of a number of loans into a single new loan. Read more...
Principal - The total amount of a loan, not including any capitalized fees or interest. Read more...
Repossession - A creditor's taking of property that has been pledged as collateral for a loan. Read more...
Secured Debt - A debt on which a creditor has a lien. Read more...
Unsecured Debt - A debt that is not tied to any item of property. Read more...
