Debt Reduction Consolidation

Debt: An amount owed to a person or company for funds borrowed. Debt can be represented by a loan, bond, mortgage or other forms stating repayment terms and interest requirements. These different forms all imply intent to pay back an amount owed by a specific date, which is set forth in the repayment terms.

Debt Advice: Term used when a person or entity seeks help from another source regarding debt.

Debt Consolidation: Term used to describe services that assist in cosolidating debt, usually involves getting a loan.

Debt Counseling: Term used to describe services that assist in lowering debt.

Debt Elimination: Term used when a person or entity eliminates the amount of debt owed.

Debt Free: Term used when a person or entity has no outstanding financial obligations. Click here for a quote and be debt free!

Debt Help: A term used to describe services that assist in lowering debt.

Debt Reduction: a transaction which involves a reduction in the face value of an outstanding debt.

Debt Relief: A term used variously to refer to rescheduling and refinancing, debt reduction and debt settlement or both.

Debt Management: An act of taking control over your finances and your money.

Debt Management Program: Services that assist in gaining control over finances and debt.

Debt Settlement: Service provided to negotiate a settlement of the total amount owed. Rapidly becoming the top method used by consumers to resolve their debt. Settlements are typically thousands off the total principal balance and consumers generally become debt free in 12-36 months.

Default: Failure to make the required debt payments on a timely basis or to comply with other conditions of an obligation or agreement.

Deferred payment: A debt which has been incurred and will be paid back at some point in the future.

Equity: The value of a property minus the owner's outstanding mortgage balance.

Floating debt: Continuously refinanced short-term debt.

Funded debt: Loans and obligations with a maturity of longer than one year and accompanied by interest payments. Also called long-term debt.

Get out of Debt: To have no financial obligation to any person or organization. There is no obligation! Be debt free!

Home equity debt: Debt secured by a primary residence or second home to the extent of the excess of fair market value over acquisition debt.

Insolvent: Unable to meet debt obligations.

Interest: The fee charged by a lender to a borrower for the use of borrowed money, usually expressed as an annual percentage of the principal; the rate is dependent upon the time value of money, the credit risk of the borrower, and the inflation rate.

Legal assets: Any property which can be used for repayment of a debt.

Lien: A legal claim against an asset which is used to secure a loan and which must be paid when the property is sold.

Long-term debt: Loans and obligations with a maturity of longer than one year and accompanied by interest payments. Also called funded debt.

Mortgage debt: A debt created by a mortgage and secured by the mortgaged property.

Nonrecourse debt: Debt for which the borrower is not personally liable.

On account: In partial payment of a debt.

Outstanding: Debt not yet paid.

Owe: To be indebted.

Paper: A short-term debt security.

Preferred debt: Debt that takes precedence over other debts.

Prepayment: The payment of all or part of a debt prior to its due date.

Prioritization of debt: Preferred treatment of one debt over another.

Private debt: Money owed by individuals and businesses within a given country.

Reduce Debt: The act of lowering the total amount of outstanding money owed.

Repo: When the lender reclaims possession of the pledged collateral or legally forces a sale of a property because the borrower has not met the terms of the loan.

Retire: To pay off a debt.

Satisfaction of debt: Document issued by a lender upon complete repayment of a debt.

Security: Property or assets that are pledged as collateral for a loan.

Senior: Receiving priority in a debt claim in the event of liquidation.

Settle: To pay a debt or complete a transaction.

Short-term: Usually one year or less, often used to refer to bonds or loans. Opposite of long-term.

Solvent: Able to pay all debt obligations as they become due.

Subrogate: Take over a legal claim or right against a third party from another party who previously owned that right or claim. One example of subrogation is the taking over of a debt from a previous creditor.

Subordinated debt: Debt that is either unsecured or has a lower priority than that of another debt claim on the same asset or property.

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