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Debt Glossary
The cost of credit expressed as a yearly rate.
Many credit card issuers charge an annual fee for giving you credit, typically $15 to $55.
The charge for estimating the value of property offered as security.
Electronic terminals located on bank premises or elsewhere, through which customers of financial institutions may make deposits, withdrawals, or other transactions as they would through a bank teller.
A large extra payment that may be charged at the end of a loan or lease.
Bankruptcy is considered the credit solution of last resort. Unlike negative credit information that stays on a credit report for seven years, bankruptcies stay on a credit report for 10 years. Bankruptcy can make it difficult to rent an apartment, buy a house or condo, get some types of insurance, get additional credit, and sometimes, get a job. In some cases, bankruptcy may not be an easily available option.
The informal name for title 11 of the United States Code (11 U.S.C. §§ 101: 1330), the federal bankruptcy law.
Any mistake in your monthly statement as defined by the Fair Credit Billing Act.
Check with your institution to find out what days it counts as business days under the Truth in Lending and Electronic Fund Transfer Acts.
The chapter of the Bankruptcy Code providing for "liquidation," i.e., the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.
A reorganization bankruptcy, usually involving a corporation or partnership. (A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.)
The chapter of the Bankruptcy Code providing for adjustments of debts of a "family farmer," as that term is defined in the Bankruptcy Code.
The chapter of the Bankruptcy Code providing for adjustments of debts of an individual with regular income. (Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.)
A creditor's assertion of a right to payment from a debtor or the debtor's property.
End Lease: A lease in which you are not responsible for the difference if the actual value of the item at the scheduled end of the lease is less than the residual value, but you may be responsible for excess wear: and: use charges and for other lease requirements.
Property, such as stocks, bonds or a car, offered to support a loan and subject to seizure if you default.
Another person who signs your loan and assumes equal responsibility for it.
The right granted by a creditor to pay in the future to buy or borrow in the present; a sum of money due a person or business.
An agency that keeps your credit record; also called a credit: reporting agency.
Any card, plate, or coupon book used periodically or repeatedly to borrow money or buy goods or services on credit.
Many universities, military bases, credit unions and housing authorities operate nonprofit financial counseling programs. Some charge a fee for their services. Creditors may be willing to accept reduced payments if you are working with a reputable program to create a debt repayment plan.
The record of how you’ve borrowed and repaid debts.
A person or business from whom you borrow or to whom you owe money. Credit Insurance: Health, life, accident, or disruption of income insurance designed to pay the outstanding balance on a debt.
Your credit payment history is recorded in a file or report. These files or reports are maintained and sold by consumer reporting agencies (CRAs). One type of CRA is commonly known as a credit bureau. You have a credit record on file at a credit bureau if you have ever applied for a credit or charge account, a personal loan, insurance or a job. Your credit record contains information about your income, debts and credit payment history. It also indicates whether you have been sued, arrested or have filed for bankruptcy.
Most creditors use credit scoring to evaluate your credit record. This involves using your credit application and report to get information about you, such as your annual income, outstanding debt, bill: paying history, and the number and types of accounts you have as well as how long you’ve had them.
Past, present, and future ability to repay debts.
A plastic card, which looks similar to a credit card, that consumers may use at an ATM or to make purchases, withdrawals, or other types of electronic fund transfers.
Failure to repay a loan or otherwise meet the terms of your credit agreement.
Information that must be given to consumers about their financial dealings.
A variety of systems and technologies for transferring funds electronically rather than by check.
The value of a debtor's interest in property that remains after liens and other creditors' interests are considered.
The total dollar amount credit will cost. Grace period: This is the time between the date of the credit card purchase and the date the company starts charging you interest.
A form of open: end credit in which the home serves as collateral. Identity theft: Identity theft involves someone else using your personal information to create fraudulent accounts, to charge items to another person’s existing accounts, or even to get a job. Joint A credit account held by two or more people so that all can use the account and all assume legal responsibility to repay.
A payment made later than agreed upon in a credit contract and on which additional charges may be imposed.
The party to whom the item is leased. In a consumer lease, the lessee is you, the consumer. The lessee is required to make payments and to meet other obligations specified in the lease agreement.
The person or organization who regularly leases, offers to lease, or arranges for the lease of the item.
Legal responsibility to repay debt.
A charge upon specific property designed to secure payment of a debt or performance of an obligation.
A line of credit that may be used repeatedly, including credit cards, overdraft credit accounts, and home equity lines.
A lease agreement in which the amount you owe at the end of the lease term is based on the difference between the residual value of the leased property and its realized value. Your lease agreement may provide for a refund of any excess if the realized value is greater than the residual value. In an open: end consumer lease, assuming you have met the use and wear standards, the residual value is considered unreasonable if it exceeds the realized value by more than three times the base monthly payment (sometimes called the “three: payment rule”).
A line of credit that allows you to write checks or draw funds with an EFT card for more than your actual balance, with an interest charge on the overdraft.
A method by which consumers can pay for purchases by having their deposit accounts debited electronically without the use of checks. Points and Origination
Fees paid to the lender for the loan. One point equals 1 percent of the loan amount. Points are usually paid in cash at closing. In some cases, the money needed to pay points can be borrowed, but doing so will increase the loan amount and the total costs. An origination fee covers the lender’s work in preparing your mortgage loan.
(1) The price the lessor or assignee receives for the leased item at disposition, (2) the highest offer for the leased item at disposition, or (3) the fair market value of the leased item at termination. The realized value may be either the wholesale or the retail value as specified in the lease agreement. Rescission: The cancellation of a contract.
The end of term value of the item established at the beginning of the lease and used in calculating your base monthly payment. The residual value is deducted from the adjusted capitalized cost to determine the depreciation and any amortized amounts. It is an estimate that may be determined in part by using residual value guidebooks. The residual value may be higher or lower than the realized value at the scheduled end of the lease.
Property pledged to the creditor in case of a default on a loan; see collateral.
The creditor’s right to take property or a portion of property offered as security.
A component of some finance charges, such as the fee for triggering an overdraft checking account into use. |
