debt settlement glossary
BANKRUPTCY:
A legal process that offers consumers protection while resolving debt. There are two types available to consumers: Chapter 7 and Chapter 13.
AUTHORIZATION:
AUTHORIZATION: We need your permission to disburse funds from your trust account, which you own and control. After we’ve negotiated a settlement, we’ll get your approval before making payments.
CREDIT SCORE
A number that indicates your likelihood of repaying borrowed funds. Higher scores indicate lower risk.
DEBT-TO-INCOME RATIO
(DTI): Compares monthly expenses to gross income, expressed as a percentage.
DRAFT:
The monthly funds you commit to the program, accumulating in your trust account.
CREDITWORTHINESS:
Lenders consider multiple factors beyond credit scores, including debt-to-income ratio (DTI).
SETTLEMENT LETTER:
A document outlining the terms of a negotiated settlement.
SIF LETTER:
A letter provided by the creditor after receiving the final settlement payment, confirming the account is paid in full.
STIPULATED AGREEMENT:
An agreement outlining settlement terms, often required in legal cases.
SUMMONS:
A legal document notifying a consumer of a lawsuit.
TRUST ACCOUNT:
A special account maintained by a third-party firm, owned and controlled by you.
UNSECURED LOAN:
A loan made without collateral, such as personal loans, credit cards, and lines of credit. Our program focuses on resolving unsecured loans.
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