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Credit Dictionary
The Free Credit Card TrapThey arrive in your mail - a conspicuous looking mail piece from some "official looking" bank claiming that you ..... Accounts Receivable: credit extended by any person or company to another (normally unsecured) with usual repayment terms requiring a monthly payment to amortize the balance owed.
Amortize: To liquidate or reduce an amount owed through a series of payments.
ANI: See Automatic Number Identifier.
Attorney: A legal agent authorized to appear before a court of law as a representative of a party to a legal controversy.
Automatic Number Identifier: The ability of a company to identify an 800-number caller's name and address. Every time a consumer calls one of these toll-free 800 numbers, there is a record of that call; the debt collection community frequently uses this to locate a consumer's home or business location after they have gone underground. (Use pay phones!)
Bad Debt Expense: An accounting category reserved for debts deemed uncollectible.
Bankruptcy: A legal maneuver allowing consumers or businesses to discharge all debts and liabilities. The actions of most debt collection agencies force consumers into bankruptcy instead of settling outstanding accounts.
Blackmail: Any payment induced by or through modation, by use of threats of injurious information or accusations. (A technique frequently used by unethical debt collection agencies.)
Bulletproofing: Insulating yourself from financial adversaries such as creditors, debt collectors, attorneys, etc. Simple techniques include obtaining an unlisted phone number and post office box to more advanced maneuvers such as use of family trusts, corporations, etc.
Cease-Commed: Term used, by the debt collection industry to describe the status of an account. When a consumer has cease-commed a debt collector this means that they have invoked federal law by sending a Cease & Desist letter via certified mail, forcing the debt collector to cease collection activity of that account.
Choosing And Using Credit CardsFederal Trade Commission - February 1993 Shop around for credit card terms that are best for you. Make sure you understand the ..... Certified Mail: Specialized postal service technique utilized to track delivery and obtain proof of delivery of letters or packages.
Chapter 7: A consumer bankruptcy filing that liquidates all non-exempt assets to pay off creditors.
Chapter 12: Bankruptcy filing reserved for working ranches, farms, etc.
Chapter 13: A type of consumer bankruptcy filing that allows the consumer to pay off creditors within a specific time period, no longer than five years. Also referred to as a "wage eamer" plan.
Chapter 20: Ploy used by some bankruptcy attorneys to delay a foreclosure of real property by filing a Chapter 13 petition, then quickly converting the filing to a Chapter 7.
Charge-off: A creditors action taken on an uncollectible account. Alternative term used: Written Off To Bad Debt Expense. This action normally results in negative information lines on a credit report that can stay for at least 7 years. (Also see uncollectible)
Class-action lawsuit: A legal action initiated by 3 or more parties against a defendant. Many suits in this category are initiated by state or federal attorneys.
Coercion: Exercising force to obtain compliance. A favorite technique employed by debt collectors and attorneys representing creditors.
Commission: A sum or percentage paid to a person for his successful completion of services.
Consumer Credit Counseling Service (CCCS): A nonprofit organization that sells itself to the American public as the last hope for consumers buried in debt. The reality is that they are actually debt collectors for the original creditors, a fact that seems to be routinely shuffled aside and not disclosed to the consumer.
Credit LettersLetter No. 1 Date Your Name Your Address Your Social Security ..... Consumer literacy test: A test proposed by the author to be given to high school students to determine competency in basic consumer skills. These skills include how to open checking and savings accounts, how to balance a checkbook, how to create/follow a budget, how credit cards work, a brief understanding of insurance, etc.
Contingency basis: A fee paid to a third party for their involvement in either a legal proceeding or debt collection. This fee is normally paid only when a successful outcome to a legal proceeding or debt has been collected, either in part or in full.
Signature LoansHere is another passport to success in taking advantage of a good deal or profitable transaction ..... Credit grantor: Companies or individuals that extend financing to consumers. A credit grantor can be a mortgage company willing to finance a house, a bank willing to finance an automobile, or a major national credit grantor willing to extend credit through the issuance of a charge card such as Visa, MasterCard or Discover.
Credit manager: Individual that oversees the lending department in a bank, department store or other credit-granting entity. Many times this individual will work closely with the collections manager to develop collections strategies for past due/bad debts.
Credit record: National grading system filed by subject's name, birth date and social security number. Major companies providing these services include TRW, TransUnion and Equifax.
Credit repair manual: Derogatory term used by the credit reporting industry for any books that may show consumers the inside information about their industry.
Criss-cross: A directory, also known as a City Directory, that is frequently used by the debt collection community to find out information about a debtor's neighbors. One section lists households and businesses by street address; another lists all telephone numbers by exchange (in numerical order) and to whom each number is assigned. A powerful tool of information intimidation utilized to put fear into unwitting consumers.
Databases: Term used to describe the enormous pools of information managed by computers. Creditors and debt collectors will access national credit databases managed by companies like TRW, CSC/Equifax, TransUnion, etc.
Debtors' havens: Term that refers to states such as Texas and Florida which have liberal laws protecting debtors from creditors.
Deceptive forms: Another trick of the debt collector trade, these forms can take on a variety of intimidating looks-from threatening (but non-binding) documents that appear to have been issued by a court of law to demand letters that look like something issued by the IRS. Of course they're illegal ... you don't think that will stop the debt collectors from using them, do you?
Deed in lieu of foreclosure: Technique used with mixed results by consumers unable to continue making payments on their homes. Sometimes lenders will allow debtors to deed the property back to the lender instead of suffering through the embarrassment of a foreclosure sale on the courthouse steps.
Deep discount: When a creditor sells Accounts Receivable or Bad Debts at an amount normally less than 50% of the outstanding balance.- Many times these sales are made to companies that specialize in buying these types of "dead assets."
Defaulted student loans: Loan made to students to attend secondary educational institutions at low interest rates. These loans were guaranteed by the federal government as an inducement to banks to make these loans but as a result, were poorly researched before being made. Over $13 billion of these loans exist and are now owned by the U.S. government. Revised laws now enable consumers to restructure these loans. Contact the Department of Education in Washington, DC.
Deferment: Contractually agreed-to period of time a borrower is allowed to suspend payment on a debt. Usually applies to student loans and suspends the accrual of interest or late fees on the outstanding loan balance.
Deposition: Sworn statement made in the presence of a court reporter (usually) as a result of questions posed by attorneys in court (or post judgment) action. These statements are normally made outside a court of law, but are fully admissible during trial and fully binding under perjury statutes.
Discharged: To relieve of obligation, responsibility, etc. Common term used in bankruptcy court to describe the process of eliminating debtor obligations.
Discounts: Selling Accounts Receivable or Bad Debts at an amount normally in excess of 5 1 % of the outstanding balance. Many times these sales are made to companies that specialize in buying these types of "dead assets."
Dispossession of property: Taking away property against the owner's wishes, normally as a result of non-payment.
Federal Credit LawsThe Fair Credit Reporting Act of 1971: (a) Gives you the right to know what information is held .....
Erroneous information: False, misleading or incorrect data. Frequently found in consumer medical or credit files across America.
Exempt assets: Assets not at risk of being seized or forfeited as a result of legal action.
Financial management: Technique used to balance income vs. expenses. Responsible financial management usually results in an excess of monies available. (This style of managing finances has yet to be mastered by the United States Government.)
Flaky loans: Questionable loans made by banks in the 1980s such as student loans or land development loans. (see defaulted student loans)
Fraudulent activity: Transaction designed to swindle consumers or creditors, normally cheating these groups out of goods, services or assets. (see sign of the beast)
Freebie report: A copy of your credit report given to you at no charge for one of two reasons ... every consumer gets a free report from TRW just for asking and every consumer gets a free copy of their credit report if they have been declined credit.
Getting bulletproof: The process of insulating a person from lawsuits, garnishments, creditor intrusion and harassment. Popularized in Texas during the late 1980s ... now being utilized by consumers/business people in California and the East Coast.
Hired gun: The hiring of third party debt collectors or attorneys to emotionally pummel a consumer in hopes of collecting an overdue account.
Hot checks: Drafts on a bank account that will be or have been returned by the bank for insufficient funds to pay face amount of check issued.
IRS refund offset program: Effort initiated by the Department of Education to recover defaulted student loans by seizing the tax refunds of consumers with the assistance of the Internal Revenue Service.
Interrogatory: Sworn statement made in writing as a result of a list of questions/inquiries by attorneys in court (or post judgment) action
Intimidation: Inspiring or inducing fear (a favorite tactic of debt collection agencies).
Knee Breaker Collection Agency: Generic name used to describe a collection agency that may use techniques that are not endorsed by the American Collectors Association or deemed legal by the federal government under the Fair Debt Collections Practices Act. (see Vito)
Lawyers: (see Attorneys)
Leverage: A negotiating position of strength; something creditors may have, debt collectors never have, and consumers almost always have.
Mail drops: Companies like Mailboxes, Etc. and others who provide a valuable service to consumers wanting to distance themselves from intrusive individuals such as debt collectors. Allows a new mailing or street address to be instantly created by consumers trying to insulate their lives.
Medical bills: The number-one reason consumers have been filing for bankruptcy, medical bills many times can be appealed or I negotiated with the original provider. It is not uncommon to be grossly overcharged or miss-billed for medical services, so it's important for consumers to be aggressive when auditing these statements.
National Foundation For Consumer Credit: Parent organization for CCCS. (see Consumer Credit Counseling Service)
Negative information (or remarks): Statements or grades assigned on credit reports due to late payment, non-payment or default on debts owed to creditors. Bankruptcies and hens also show up under this category. Favorite point of leverage utilized by collection agencies attempting to passively blackmail consumers.
Nine-Digit Zip Code: Increasingly becoming a powerful tool for skip tracing, the 9-digit zip codes allow specific location (if a current address can be located) of a consumer, courtesy of the U.S. Post Office. (Another compelling reason to utilize post office boxes or mail drops.)
Non-dischargeable debt: Debt that cannot be eliminated through bankruptcy court. Some types of IRS debt, student loans and certain types of judgments fit into this category.
Old debt: Debt that has been charged off/written off by a creditor, normally referred to an outside 'third party" collector. Old debts are usually those debts/accounts that have not had charge or payment activity for over 2 years and are the easiest to negotiate payment/removal from credit reports with creditors.
Open account: An account with a creditor that is still on the books and, in the opinion of the original creditor, collectible. These types of accounts usually are reported/updated to the credit bureaus and report late payments. They can be the most difficult to negotiate with a creditor.
Oxymoron: A term that contradicts itself, such as "jumbo shrimp" or "military intelligence" or "ethical debt collector" or "reasonable legal fees."
Paid As Agreed: Old term used on consumer credit bureau reports to describe an account that may have been renegotiated and/or settled for less than the full amount. Many creditors are now flagging these notations as negatives, so it's important that your creditor ......
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