Common Debt Terms

Lots of terminology when dealing with debt and debt consolidation - make sure you know who's who.

Debtor - Any person currently using credit cards, holding a personal loan, paying on a home mortgage, or borrowing money from another party with an arrangement to repay credit or loans over a period of time, usually with interest.

Creditor - Any bank, mortgage lender, credit company, retailer or other business extending credit or issuing loans to consumers.

Debt Collector - Any person who regularly collects debts owed to others, including attorneys who collect debts on a regular basis.

Third-party Financial Assistance - Credit Counseling, Credit Repair, Debt Consolidation, or other Agencies offering financial assistance to consumers. Some agencies are for-profit, while others are not-for-profit, often funded by communities, governments, or even creditors.

Secured Debts - secured debts are typically tied to an asset, like a car for a car loan, or a house for a mortgage. If payments are missed, the lender can repossess the asset. Secured debts are usually not included in credit counseling and debt managment plans.

Unsecured Debts - unsecured debts are not tied to any asset. Examples of unsecured debts include credit card debt, medical bills, signature loans, and debts for other types of service.

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