Bankruptcy - Having been legally declared financially insolvent. There are two types of bankruptcy - liquidation, in which your debts are cleared (discharged) and reorganization, in which you provide
court with a plan for how you intend to repay your debts.Collateral - Property acceptable as security for a loan or other obligation.
Collection Agency - A company hired by a creditor to collect a debt that it is owed.
Contract - An agreement between two or more parties, usually written down and enforceable by law .
Cosigner - To endorse (another's signature), as a loan agreement, lease or credit application. If primary debtor does not pay, cosigner is fully responsible for loan or debt.
Credit Bureau - An organization to which business firms apply for credit information on prospective customers.
Credit Report -An account of your credit history, prepared by a credit bureau. A credit report will contain credit history, such as what you owe to whom and whether you make payments on time, as well as personal history, such as your former addresses, employment record and any lawsuits in which you have been involved.
Creditor - A person or entity (such as a bank) to whom a debt is owed.
Debtor - A person or entity (such as a bank) who owes money.
Debt to Income Ratio - Most mortgage lenders use this ratio to analyze your financial well-being. It is figured by using your monthly debt divided by your monthly income. The lower percentage better your financial picture. This is often referred to as credit worthiness.
Default - To fail to pay money when it is due. A default on a mortgage or loan takes place when you fail to make loan payments on time, fail to maintain adequate insurance or violate some other provision of your agreement with mortgage / loan company.
Discharge (of debts) - A court's writing of off debts of a person or business that has filed for bankruptcy.
Dischargeable Debts - Debts that can be erased by going through bankruptcy.
Down Payment - A cash payment made by a buyer when they purchase a property.
