BFine Terms You Need to Know
Managing your financial future is easier when you understand what is being said. Below are some of the key terms that are used with finance and bankruptcy.
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The meeting of creditors required by section 341 of the Bankruptcy Code at which the debtor is questioned under oath by creditors, a trustee, examiner, or the U.S. trustee about his/her financial affairs. Also called creditors' meeting.
A legal procedure for dealing with debt problems of individuals and businesses.
The informal name for title 11 of the United States Code (11 U.S.C. §§ 101-1330), the federal bankruptcy law.
The bankruptcy judges in regular active service in each district; a unit of the district court.
A judicial officer of the United States district court who is the court official with decision-making power over federal bankruptcy cases.
The individual who is requesting the loan and who will be responsible for paying it back.
A person or company to whom money is owed.
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.)
The chapter of the Bankruptcy Code providing for adjustment 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.)
When a business sells your debt for a reduced amount to an agency in order to recover the amounts owed.
Companies that collect information from creditors and lenders about consumer financial behavior. This data is then provided to businesses that want to evaluate how risky it would be to lend money to a potential borrower. The three national credit bureaus are Equifax, Experian and TransUnion. Also known as Credit Reporting agencies.
A numerical evaluation of an individual’s credit history used by businesses to quickly understand how risky a borrower you are.
The individual records of consumer financial behavior kept by credit bureaus and provided to businesses when they want to evaluate potential borrowers.
Provides individuals with guidance on consumer credit, money management, debt management, and budgeting.
A process of combining debts into one loan or repayment plan.
The percentage of your monthly pre-tax income that is used to pay off debts such as auto loans, student loans and credit card balances.
A person who owes a sum of money.
The act of delaying or postponing.
A release of a debtor from liability for a debt.
Fair and Accurate Credit Transaction (FACT) Act
The FACT Act was signed into law December 2003 and includes several consumer credit industry regulations. This law requires credit bureaus to provide all US residents with a free copy of their credit report once every 12 months. The law also includes privacy regulations, identity theft protections and dispute procedure requirements. First passed in the 1970’s that promotes accuracy, confidentiality and proper use of information in the files kept by credit reporting agencies. This law specifies the expiration terms of records on your credit report, defines who can access your credit data and grants consumers the right to view and dispute their credit records.
The Fair Debt Collection Practices Act (FDCPA)
The Fair Debt Collection Practices Act (FDCPA) is a 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.
A refraining from the enforcement of something (such as a debt, right, or obligation) that is due.
When a borrower is in default on a loan or mortgage, the creditor can enact a legal process to claim ownership of the collateral property. Foreclosure usually involves a forced sale of the property where the proceeds go toward paying off the debt.
When a creditor receives legal permission to take a portion of an individual’s assets (bank account, salary, etc.) to repay a delinquent debt.
An individual’s total income, before any taxes or other deductions have been applied.
The part of a home’s value that the mortgage borrower owns outright. This is the difference between the fair market value of the home and the principal balances of all mortgage loans.
Individual Taxpayer Identification Number (ITIN)
This nine digit identification number is issued by the Internal Revenue Service to taxpayers who don’t have a Social Security number, such as people who are not US citizens. This number can be used to apply for credit and loans or to access credit reports.
The right to take and hold or sell property as security or payment for a debt or duty.
A sale of a debtor's property with the proceeds to be used for the benefit of creditors.
The process of paying off and replacing an old loan with a new mortgage.
An individual’s income after taxes and other withholdings have been deducted. Also known as take-home pay.
A debt that cannot be eliminated in bankruptcy.
The period of a loan when a borrower is required to make payments.
Secured Credit Card
A consumer credit account that requires the borrower to produce some form of collateral—usually a cash deposit equal to the amount of the credit limit on the card.
An agreement reached with a creditor to pay a debt for less than the total amount due. Soft Credit Inquiry A type of inquiry that does not harm your credit score.
A claim against property, or assets, field by the taxing authority for unpaid taxes.
An administrator appointed by the court to oversee the debtor's estate in a bankruptcy proceeding.