Glossary of Collection Terms

Abstract of Judgment

An Abstract of Judgment is a summary of a judgment including the amount owing that is recorded in the county recorder's office. The abstract of judgment notifies credit reporting agencies that calculate FICO scores, and most importantly, cause the judgment to attach to all real estate owned by the judgment debtor at the time of recording and all real estate later acquired by the judgment debtor.

Acknowledgement of Satisfaction of Judgment

A form signed by the judgment creditor that the debtor has paid the judgment debt in full.

Allege (or assert)

To claim or maintain that something is true (for instance, that the debtor signed something).


To transfer a claim from the original creditor to a debt collection agency or other party for collection.

Bank Account Levy

A Bank Account Levy is a legal process whereby a creditor may obtain all of the funds owed by a judgment creditor deposited in one or more banks or credit unions, to be applied to a judgment that is owed.


A federal court process that discharges most or all of a debtor's debts in exchange for the debtor's non-exempt property; see Wage Earner Plan.


Prevented; for example, a statute of limitation may bar (prevent) the filing of an old claim.


To back out of, rescind, extinguish, or terminate.


Any amount added to a debt, such as interest, court costs, attorney's fees, or collection fees.

Claim (or amount claimed)

The amount that a collector believes is owing.

Claim (or assert)

To demand payment of an alleged debt, or to assert a defense to an alleged debt.


Property given by the debtor to a creditor to secure payment of the debt (see Secured Debt).

Collection Fees

Fees that a debt collector will attempt to add to a debt to cover the expenses of collecting it.


A business or person who attempts to collect a debt; may be a creditor or a debt collection agent or assignee.

Complete Defense

Where the person against whom a claim is made has no legal obligation to pay anything.

Consumer Debt

A debt incurred by a natural person, in a marketplace transaction, for personal, family, or household purposes.


A legally enforceable agreement.

Corroborating Evidence

Facts or documents that help to support a party's position in a case.


Someone other than the debtor who has promised to pay a debt if the debtor does not pay it.

Court Costs

Certain court related expenses of the prevailing party, which the court may add to the debt.


The right to incur a debt, or the right to delay repayment of a debt.

Credit Record

A history of one's use and repayment of credit, including any delays in payment, compiled by a credit reporting agency.

Credit Report

A summary of a person's credit record prepared by a credit reporting agency and sold to prospective creditors and others.

Credit Reporting Agency

A business (sometimes called a credit bureau) that compiles data and sells credit reports to other businesses.

Credit Standing

A person's reputation for the payment of debts, as documented in his or her credit record.


A business or individual who extends credit, or to whom a debt is owed.


A legal obligation to pay money, often resulting from a purchase on credit or a loan of money; generally means an obligation arising from a consumer transaction.

Debt Collection

Activity that results in payment of debts.

Debt Collection Agency

A business that collects debts that were originally owed to some other creditor. Also called "debt collector."

Debt Counselor

A professional person who is an expert in personal finance and financial problem solving.


A person who has a legal duty to pay money to someone else.

Debtor's Exam

A Debtor's Exam is a court proceeding in which a debtor is forced to appear in court to answer questions under oath asked by the creditor, an assignee of the debt, or his or her attorney. The debtor is required to answer questions about his or her income, employment, clients, customers, spouse, assets, and provide other information that would assist the creditor in collecting the judgment. If the debtor does not appear in court, the court may issue a bench warrant for the arrest of the debtor. Debtors must bring subpoenaed documents such as paycheck stubs, bank statements, property title documents including deeds, and other information that would assist the creditor in collecting debt.


To harm someone's reputation by communicating false information to a third party.


Where all or part of a claim is not legally enforceable (a partial defense or complete defense).

Demand for Payment

A creditor's or debt collector's request for payment of an alleged debt.


To assert that one does not owe the amount claimed (or when used as a noun, a controversy).

Dunning Letter

A letter from a creditor or debt collection agency that demands payment of a debt.


When a court would find the claimed debt to be lawfully owed to another, and would issue a court judgment that declares that the debtor owes it.


An oral or written statement, or a document, photograph or drawing (etc.), that is offered to prove a position.


The enforcement of a judgment by a sheriff, pursuant to a writ of execution, against the debtor's earnings, bank account, or other property.


Earnings or property that is protected by law against being seized to satisfy a judgment.


A common example is a false statement that is made knowingly, intended to be relied upon, and relied upon justifiably by another, with resulting loss.

Garnishment of Earnings

A levy of execution by a court officer on someone's earnings, a portion being taken each pay period to pay off a judgment.

Good Faith

Honestly, based on a reasonable belief that something is authorized and legitimate.

Grace Period

The number of days after a due date within which the debtor can pay without paying a penalty.


The total of the debts that the debtor owes.

Installment or Installment Payments

Monthly or weekly payments to a creditor or debt collector.


A charge for using or delaying repayment of money (amount x rate x time=interest).


A court document that states the amount that the court has determined a debtor owes.

Judgment Creditor

A party to a lawsuit, who was awarded a court judgment against another party.

Judgment Debt

The total amount that will pay off a judgment, including: (a) the original debt; (b) the pre-judgment interest, court costs and other charges; and (c) any interest and court costs after judgment.

Judgment Debtor

A party to a lawsuit, against whom another party was awarded a judgment.

Judgment Lien

A security interest in real property which prevents its sale until the judgment debt is paid.

Judgment Proof

Where, since the debtor has no income or property, a court judgment is worthless.


To vex, trouble, or annoy someone continually or chronically. It is unlawful to harass someone in connection with the collection of a debt.


Lawful, authorized, honest, genuine.

Levy of Execution

Action taken by a court officer to enforce a judgment against a debtor's earnings, bank account, or property, pursuant to a writ of execution.

Lump Sum Payment

Payment (usually in full) by a single check, money order, or cash payment.


To help the parties to a dispute to reach a voluntary settlement of the dispute.

Negative Item

An entry in a person's credit record (maintained by a credit reporting agency).


Interact with someone (as by talking with that person), in an attempt to reach an agreement.


A legal duty owed to another person.

Original Creditor

The business or person to which the debtor first owed the debt, before the business or person assigned it to the debt collector for purposes of collection.

Partial Defense

Where the person against whom a claim is made has a legal obligation to pay part of a claim, but not all the claim.

Preponderance of Evidence

Evidence that is at least slightly more persuasive than the contrary evidence.

Payment Plan

A Payment Plan is a written agreement signed by the judgment creditor and the judgment debtor that permits the judgment debtor to pay the amount owed over time. Sometimes Payment Plans incorporate a provision that grants the forgiveness of a portion of the debt if the judgment debtor complies with its terms. All collection action ceases during the period that payments are being made.


A requirement that must be met before a claim is legally owed, or before some other right exists.

Principal Amount

The amount owed, before adding interest or other charges.


A person's interest in being left alone, or in not having others know things they have no right to know.


A legal method of enforcing the payment of a debt, or of enforcing some other right, as by filing a lawsuit, or by arranging for a levy of execution to enforce the judgment of a court.


To take possession of a property (such as a person's real estate) that secures repayment of a secured debt that had been paid.


An interest protected by law, such as a right to possess property, enforce a contract, recover money, receive information, or enjoy privacy.

Right to Cancel

A legal right to back out of, rescind, extinguish, or terminate, a contract.

Secured Debt

Where the debtor has given the creditor a legal right to take certain described property of the debtor (such as the debtor's car or home), using proper procedures, if the secured debt is not paid.


An agreed solution to a problem, usually including the payment of money, and release of the claim.

Settlement Offer

An offer to the other party to resolve a dispute by some kind of compromise.


A court officer whose job it is to enforce court judgments, as by a levy.


A rule adopted by a legislative body, such as a law that regulates debt collection activities.

Statute of Limitation

A statute that limits the time within which a lawsuit can be filed to enforce a claim.


To provide substantial evidence that proves or verifies the truth of something.

Third Party Examination

A Third Party Examination is similar to a Debtor's Examination in that the party being examined is subpoenaed to appear in court and testify under oath about the location of the debtor's assets. Third parties may be employers, clients, customers, partners, spouses, other relatives, landlords, and others that may assist a creditor in the enforcement of a judgment.

Till Tap or Keeper Levy

A Till Tap is a legal process whereby the sheriff will go to a business and seize cash sufficient to pay a judgment or a portion of an unpaid judgment. A Keeper is a sheriff who remains in the business for a specified period of time to collect cash.

Unsecured Debt

Where the debt is not backed by collateral and the creditor therefore has no right to automatically take the debtor's property if the debt is not paid.

Verification Notice

A written communication from a collector to a debtor that invites the debtor to inform the collector of any defenses to a claim.


Subject to cancellation (rescission) at the election of a party; if a contract is "void" it is altogether invalid.

Wage Earner Plan

An arrangement for the repayment of creditors under bankruptcy court protection.

Wage Garnishment

A Wage Garnishment is a legal process whereby a creditor may obtain up to 25% of a debtor's gross wages each pay period to be applied to a judgment that is owed.


To forgive something, such as interest, court costs, part of a claim, or a deadline for payment.

Writ of Execution

A court order to the sheriff to levy on the debtor's earnings and/or other property.





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