Bankruptcy > Debt a Glossary of Terms

Debt a Glossary of Terms

Bankruptcy - Having been legally declared financially insolvent. There are two types of bankruptcy - liquidation, in which your debts are cleared (discharged) and reorganization, in which you provide the court with a plan for how you intend to repay your debts.Collateral - Property acceptable as security for a loan or other obligation.Collection Agency - A company hired by a creditor to collect a debt that it is owed.Contract - An agreement between two or more parties, usually written down and enforceable by law .Cosigner - To endorse (another's signature), as a loan agreement, lease or credit application. If the primary debtor does not pay, the cosigner is fully responsible for the loan or debt.Credit Bureau - An organization to which business firms apply for credit information on prospective customers. Credit Report -An account of your credit history, prepared by a credit bureau. A credit report will contain credit history, such as what you owe to whom and whether you make the payments on time, as well as personal history, such as your former addresses, employment record and any lawsuits in which you have been involved.

Creditor - A person or entity (such as a bank) to whom a debt is owed. Debtor - A person or entity (such as a bank) who owes money.Debt to Income Ratio - Most mortgage lenders use this ratio to analyze your financial well-being. It is figured by using your monthly debt divided by your monthly income. The lower the percentage the better your financial picture. This is often referred to as credit worthiness.Default - To fail to pay money when it is due.

A default on a mortgage or loan takes place when you fail to make the loan payments on time, fail to maintain adequate insurance or violate some other provision of your agreement with the mortgage / loan company.Discharge (of debts) - A court's writing of off the debts of a person or business that has filed for bankruptcy.Dischargeable Debts - Debts that can be erased by going through bankruptcy.Down Payment - A cash payment made by a buyer when they purchase a property.Equity - An increase in the value of your home or decrease in the loan amount on your home creates equity. Equity is the difference between what is owed on your home and the sale value. Most home equity lenders will allow you to borrow up to 80% of that value.Fair Isaac and Company - Fair Isaac is the company responsible for creating the popular FICO score. This three digit score is created using information from your credit report and ranges from 300-850.Foreclosure - The forced sale of property to pay off a loan on which the owner of the property has defaulted.Garnishment - A court order directing a third party who holds money or property belonging to a defendant to withhold it and appear in court to answer inquiries.Grace Period - A period of time during which you are not required to make payments on a debt.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.Interest - A commission you pay a bank or other creditor for lending you money or extending you credit. Usually calculated as a percentage of the mortgage or loan.

Lien - The right to take and hold or sell the property of a debtor as security or payment for a debt or duty.Loan Consolidation - The combining of a number of loans into a single new loan. Usually done to gain more favourable terms e.g. lower cost repayments or longer time to pay. Principal - A sum of money owed as a debt, upon which interest is calculated. If you purchased an item for $100 on your credit card that would be the principal balance.Repossession - A creditor's taking of property that has been pledged as collateral for a loan.Secured Debt - A debt on which a creditor has a lien.

A car loan would be an example of secured debt.Term - The time required to repay a loan.Unsecured Debt - A debt that is not tied to any item of property. Credit card debt is an example of unsecured debt..

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The Right Way To Credit Repair

If you have a bad credit rating, then you might find that your ability to get financing, loans, and even some jobs is greatly diminished. Once you have a bad credit rating, it might seem like there's nothing that you can do about it? but you don't have to believe that. It's not as difficult as you might think to get by with a bad credit rating; with a little work and time you can even repair it! Of course, before you do that it's important to realize exactly what a credit rating is. Every time a lender or other creditor makes a report concerning your payment history to them, this report affects your credit score. Your credit score is a numerical indication of the positive and negative reports that you've received from creditors and lenders; if the number is high then you have a good credit rating, and if it's low then you have a bad credit rating.

Basic credit repair Get organized! Make a folder for all your correspondence offline and online. You will have to do some snail mailing...

The Right Way To Credit Repair

Bankruptcy > The Right Way To Credit Repair

How to Tell When it?s Time to Declare Bankruptcy

With passage of the Bankruptcy Abuse Prevention and Consumer Protection Act virtually assured, many experts believe financially-strapped consumers will rush to their local bankruptcy court to file before the bill becomes law. This raises the question: Is bankruptcy right for you if you're struggling to make ends meet each month?The answer, according to consumer advocate Paula Langguth Ryan, isn't always clear cut. In fact, depending on how old your debts are, your payment history and your personal situation, bankruptcy may actually hurt you more than doing nothing."If you haven't paid anything on your outstanding debts in four or five years, and there's no chance you're going to be able to pay anything on them in the next few years," says Ryan, "you'll have a clean slate in two to three years when those debts fall off your credit report." Compare that to having a bankruptcy listed on your credit report for another 10 years and bankruptcy doesn't look like your best option, unless you...

How to Tell When it?s Time to Declare Bankruptcy

Bankruptcy > How to Tell When it?s Time to Declare Bankruptcy

All About: Debt Management Services

Are your loads of debts bothering you? Do your creditors keep calling to remind you of your liabilities? Are you afraid you might not be eligible to borrow again just to make ends meet? If the answer to these questions is yes, then you might want to seek advice from a debt management services company. They offer solutions through debt management that will eventually free you of debts.

Debt management is a term that refers to a ?third party' between the debtor and their creditors. A debt management specialist will work with you to come up with a viable plan to repay your debts and lower your monthly payments. This is done by consolidating all of your bills into one.

The debt management service collects a monthly payment from you and disperses this payment to all of your creditors. At the same time, they work with your creditors in order to reduce any finance charges or late charges that might be excessive. The debt management service gets a commission by taking a...

All About: Debt Management Services

Bankruptcy > All About: Debt Management Services

Mortgage After Bankruptcy

Most people probably assume that obtaining a mortgage to purchase a home, refinance or to consolidate debt after a bankruptcy is out of the question. In fact, many people are able to obtain these mortgage services, even 1 day after a bankruptcy discharge in some cases. Loan programs and lenders are available that require little or no time after the discharge of a bankruptcy. Here are a few tips to speed up the road to credit recovery and the mortgage services you desire. First, continue timely paying on items such as your home and cars that were not discharged in the bankruptcy.

Having at least a couple credit items you are paying on- time will help. Second, limit the amount of other debts such as credit cards or bank loans. Too much debt will make it more difficult to qualify for a loan, particularly revolving credit accounts such as credit cards. Your debt-to-income ratio is one part of the puzzle lenders will look at in determining your ability to repay a mortgage. Another...

Mortgage After Bankruptcy

Bankruptcy > Mortgage After Bankruptcy