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Common debt terms you should know
Jul 16, 2004

As you learn more about credit and debt management you'll begin to run across terminology you may be unfamiliar with. Below is a primer on a few important definitions you should know.


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.

Related Article: Understanding Credit Debt - What You Should Know First >>