Glossary of Terms

Debt: To get or receive money on loan with an obligation or liability that it will be repaid (with rate of interest, if promised.)
Reference: John has sold his car to pay back his debt.

Debt arbitration: Debt arbitration is a negotiation process in which both the debtor and the loan provider agree to surrender to an unresolved dispute to a neutral third party for settlement. Both sides present their positions, and the arbitrator makes a decision which side is permitted to what types of relax.

Debt Consolidation: Debt consolidation requires taking out one loan to pay off for many others. This is done frequently for protecting a lower and fixed interest rate for the easier payment of one single amount.

Debt consolidators: The person or consultancy which provides counseling support to both debtor and the loan provider for easy repayment of loan.

Debt counselors: Debt counselors provide valuable tips and counseling for repayment of the multiple debts easily.

Debt relief: Debt relief is the partial or complete release process of debt amount, or the slowing or stopping the growth of debt. The debtor can be an individual, a corporation, or a nation. This is related particularly to the Third World Debt, which became a great problem with the Latin American Debt Crisis (Mexico 1982.)

Debt relief agency: Debt relief agency is a type of consultant firm that provides all types of financial counseling and even financial support to bankrupt people. As per 11 USC 527, a debt relief agency must provide a comprehensible and obvious written notice suggesting bankrupt people that:

Debt relief counseling: The advice and counseling that a debt relief management firm for smooth and easy repayment of debts are called as “debt relief counseling.” IN America, the average family debt amount is approximately $18,000 (excluding mortgages.) That’s why, most of these debt relief counseling firms are participating actively to make a debt free America.

Debt relief management: Debt relief management firms adopt certain procedures while dealing with bankrupt persons or organizations. These firms offer professional counseling to these debtors. The steps these firms adopt to assist debtors in repaying debt are:

• Help debtors to evaluate their debt condition.
• Offer debt counseling, such as, how to duck useless overspending and give advice in managing existing debts.
• Assist the debtor to build and maintain good credit.

Debt relief programs: Debt relief programs are organized by the debt relief management firms for debtors. Through these debt relief programs, they were able to make these debtors and general people aware how to avoid unnecessary expenditure and how to manage existing debts. Main program can consist minimum the following facts:

• Lessening in minimum payments.
• Lessened or eliminated interest rates.
• Exclusion of late or over-limit fees.
• Renewing of accounts (creditors allowing for their accounts use.)
• Elimination of collection calls.

Debt Settlement: Debt settlement is an alternative option to consolidate debt and to help a bankrupt person. During debt settlement process, the customer offers a proposal to resolve the debt lesser than the original amount to be payable. The debt provider has an incentive to accept this offer if there is a high possibility collecting back the debt amount from the consumer.

Emergency debt relief: Emergency debt relief service is provided those debtors who need urgent solutions of their debt problem. You can say that it is a last minute debt consolidation program. Most of the debt settlement firms provide this service. Either the firm provides credit to these debtors on their own risk for repaying of debt or they arrange credit from other sources for them.

Financial debt recovery: Financial debt recovery service is only meant for the creditors. If the creditor is not collect credit from the debtors then the debt arbitration firms collect the receivable amount from the debtors. While collecting debts, they negotiate in between the debtors and the creditors. These financial debt recovery service providers work just as middle man and earn money as commission.

Mortgage: The term is related to law and finance, especially with creditor and debtor. 

• A short-term, provisional guarantee of possessions to a credit provider as security with an obligation for repayment of taken debt.
• An agreement stating the terms and conditions of a mortgage.
• The declaration of a mortgagee upon submitted property as mortgage.

Unsecured debt: A loan is called as “unsecured”, when the creditors provide credit without any mortgage against it. Unsecured debt is just the contrary of secured debt. In case of unsecured debt, a creditor provides credits without any security that the fundamental financial law provides. Due to this reason, unsecured debt bears more risk for the creditors. That’s why the rate of interest of the unsecured debt much high in comparison to secured debt.