Friday, 7 August 2020, 7:26 PM
Site: MoneyU
Course: MoneyU (MoneyU)
Glossary: MoneyU Glossary of Terms
DEBT

Chapter 7 Bankruptcy

The most common form of consumer bankruptcy, Chapter 7 typically releases a debtor from all liability for the accounts included in a bankruptcy. In exchange, the debtor must forfeit some personal property. A Chapter 7 bankruptcy remains on the debtor's credit report for 10 years.

Consolidation Loan

A loan obtained in order to combine multiple debts into one, typically at a lower interest rate. (Also called Debt Consolidation.)

Consumer Protection Act

A revision of bankruptcy law intended to make the system fairer for creditors and debtors and make affordable credit available to more people.

Credit Counseling

An organization that provides debt and money management advice and assistance to people with debt problems. Not all credit counseling firms are reputable, and some might actually make your debts and credit worse.

Credit History

A record of how a consumer has paid credit accounts in the past. It is used as a guide to determine whether or not the consumer is likely to pay future accounts on time.

Credit Repair Organizations Act

Guidelines that credit repair services are required to follow in order to protect you.

Credit score

A measure of creditworthiness based on an analysis of the consumerÔÇÖs financial history, often computed as a numerical score, using the FICO or other scoring systems to analyze the consumerÔÇÖs credit. A creditorÔÇÖs evaluation of a personÔÇÖs willingness and ability to pay debts as judged by character, capacity, and capital; a mathematical model used by lenders to predict the likelihood that bills will be paid as promised.

Creeping Indebtedness

The gradual rising of debt.

Debt

A liability or obligation in the form of bonds, loan notes, or mortgages, owed to another person or persons and required to be paid by a specific date.

Debt Consolidation

The replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. (Also called Consolidation Loan.)