Glossary

Home > Self-Service Center > Consumer Debt Consumer Debt Glossary

B C D F G J L M N P R S U

borrower See debtor.	burden of proof In civil cases, the person who filed the lawsuit (i.e., "plaintiff") has the burden of proof, which means they have to prove the facts of the case that support their claim by a preponderance of the evidence.	collateral A consumer's asset that may be seized by the lender if the debt is not paid back as agreed. Examples of collateral include vehicles and real estate.
consumer See debtor.	consumer debt Personal debt that is owed from buying goods used for personal or household use. Not corporate or government debt.	counterclaim If a party has their own claim against the plaintiff, this is called a counterclaim. A counterclaim may be included in the answer or it can be filed as a separate document.
creditor A party (e.g., a person, bank or other enterprise) who lends money or extends credit to someone.	creditworthiness A consumer's likelihood to repay a loan based on their previous credit history. A consumer's credit score.	debtor A party (e.g., a person, bank or other enterprise) who was given credit and owes money to another party.
debt buyer When the original creditor determines that it is unlikely to collect a debt, it can cut its losses by selling the debt to a debt buyer. The debt buyer will own the debt and keep any amounts collected.	debt collection agency Collects delinquent debts of all types and may act as a go-between debtor and original creditor.	debt collector May work independently or for debt collection agencies. Gets paid when recovering a delinquent debt.
default When a borrower fails to repay a loan as agreed, they are in default.	default judgment An order signed by a judicial officer that awards money to one party against another party when a party fails to appear at a hearing and does not defend themselves.	deficiency A deficiency amount is the difference between the amount a person owes on a car loan at the time it is repossessed and the amount it was resold for.
delinquent account A borrower who fails to repay a loan as agreed has a delinquent account with the creditor.	disclosure statement A list of exhibits and witnesses that a party discloses or reveals and intends to use at trial.	Fair Debt Collection Practices Act Federal law that limits the actions of third-party debt collectors who are attempting to collect debts on behalf of another person or entity. The law restricts the ways that collectors can contact debtors, as well as the time of day and number of times that contact can be made.
foreclosure Legal process when a lender forces the sale of the property to recover the loan balance from a borrower who has stopped making payments to the lender.	garnishee A third party (e.g., employer, bank institution) who holds money or property belonging to a judgment debtor and who receives notice by the court to surrender judgment debtor's money to pay a debt.	garnishment Legal process for a party to collect a money judgment from another party after a judgment has been entered in court in their favor. For example, wage garnishment is when money is legally withheld from a person's paycheck and sent to the judgment creditor, now a garnishee.
judgment An order signed by a judicial officer that awards money to one party against another party.	judgment creditor If a judgment is entered in favor of a party (e.g., creditor or debt collection agency), that party becomes a judgment creditor and is responsible for collecting the money owed.	judgment debtor The debtor who owes money on a judgment.
judgment on the pleadings A judgment on the pleadings is entered by a judge when the information needed is already contained in the pleadings and the party is entitled to judgment as a matter of law.	lender See creditor.	lien A lender who supplies the borrower with the funds to purchase a vehicle or property will also place a lien, or claim of ownership, on the title.
money judgment See judgment.	negative equity When a consumer owes more money to a lender than what the vehicle is worth.	non-revolving debt A loan of a lump sum up front with fixed payments by the borrower over a predefined time period.
pleading The legal documents contained in a case file.	preponderance of the evidence Plaintiff's burden of proof in civil cases to prove that the facts are more probably true than not.	retail installment agreement When a consumer buys goods from a retailer, but instead of making a single payment at the time of purchase, they agree to installment payments with a fixed number and amount of payments on weekly or monthly basis.
revolving debt An agreement between a lender and a consumer that allows the consumer to borrow up to a maximum limit on a recurring basis.	secured debt Any debt that requires some form of collateral that may be seized by the lender if the loan is not paid back.	settlement A collection agency may negotiate settlements with consumers for less than the amount owed if the debt is difficult to collect.
statute of limitations The amount of time during which a creditor can sue a borrower for an unpaid debt.	summary judgment A judge may enter a summary judgment if there is no genuine issue of fact and the party is entitled to judgment as a matter of law.	unsecured debt Any debt that relies on the consumer's creditworthiness and their ability and promise to repay the loan.