This glossary describes key concepts and words used throughout UGotiate.
Accepted Offer: An offer that the creditor has approved to resolve the debt for less than the current balance.
Account Balance: The total amount owed on a debt. This amount is found on the bank statement, collection letter or credit report.
Account Holder: The person or persons responsible for the debt.
Bankruptcy: A legal process where a person or business declares inability to pay debts. There are several chapters of the federal bankruptcy code. Chapter 7, which covers the liquidation of the debtor’s assets, Chapter 11, which covers reorganization of a business, or Chapter 13, which covers work-outs of debt by individuals.
Collection Agency / Collection Firm: A third party company that is pursing payment on debt. Most collection agencies operate as agents of original creditors or debt buyer and collect debts for a fee or percentage of the total amount owed
Collection Call: Phone call from an Original Creditor or Collection Firm to attempt to collection on debt.
Collection Law Firm: A third party law firm that is pursing payment on debt. Most Collection Law Firms operate in the same way as Collection Firms that are not law firms. The main difference between a Collection Firm and a Collection Law Firm is that the law firm can proceed with litigation to collection on past due debt, if they so choose. In order for the Collection Law Firm to pursue legal action against you, they must have a licensed Attorney in your state
Collection Letter: Letter a Collection Firm sends to collect on debt. The intent of a collection letter is to prod you into paying the amount owed to the creditor.
Contribution Account: A separate, dedicated bank account to hold your funds for eventual creditor resolutions. You should only hold money for resolutions in this bank account.
Contribution Amount: The amount you are putting towards resolving your debt each month. This is the amount that is transferred to your Contribution Account each month.
Counter Offer: When an offer you make to resolve your debt for less than the balance is not acceptable to the creditor, the creditor may make an offer back to you for another amount.
Credit Report: A report that contains information on a person’s credit history. This report is reviewed by prospective lenders with the borrower’s permission, to determine creditworthiness.
Creditor: A term referring to the Original Creditor, Collection Firm or Collection Law Firm account.
Current Balance: The amount of money that owed on a debt today. It’s important to keep the current balance updated in UGotiate.
Debt Consolidation Program: A program that consolidates monthly payments into one payment. Each bank has their own Consolidation program and a debt management company administers the bank’s plan. The interest rate and payments are set by the bank. A Debt Consolidation program seldom reduces monthly payments, but often reduces interest rates. The average is about 11%. A Debt Consolidation Plan normally takes about 5 to 6 years to complete and commonly cost about 150% of ones starting debt
Debt O Meter: An interactive slider that assists UGotiators in building a realistic and effective Plan. Use the controls to consider different scenarios and choose what is best for your budget and situation.
Debt Settlement Program: A program to reduce debts where the debt settlement company negotiates with the creditor on the debtor’s behalf to get the creditor to agree to reduce balances and satisfy the account as paid in full. Debt Settlement Companies charge an average of 15%-20% of the total debt amount and oftentimes, the creditors will only agree to such reductions when accounts are past due.
Default Judgment: In regards to credit card debt, a Default Judgment is a legal court ruling as to the amount the debtor must pay the creditor that is bringing the action against the debtor. A Default Judgment is made without consent of the debtor, after not responding to a Summons & Complaint.
Goal: The total amount of money a UGotiator hopes to resolve their debt for. This is determined when building the Plan and playing with the Debt O Meter.
Hardship Letter: A communication of your financial hardship that is typically sent to Original Creditors. In addition to your financial hardship, the letter is to express that you are not avoiding the debt and your desire to eventually resolve your debt.
Interest Rate: The percentage rate that is charged on the amount a debtor owes.
Late Fee: The amount a creditor charges when a debtor is late with or misses a monthly payment.
Monthly Payment Amount: The amount a creditor requires a debtor to pay each month. This amount is found on the Original Creditors statement.
Offer: Proposal to or from the creditor to resolve your debt for less.
Original Balance: The balance of the creditors when first listed with UGotiate.
Original Creditor: The bank, credit card company or financial institution that originated the loan or credit card.
Over the Limit Fee: The amount a creditor charges when a debtor exceeds their credit limit. This fee will be charged every month until the balance is brought below the credit limit.
Past Due Amount: The amount that has not been paid usually due to missed payments.
Plan: The strategy you build within UGoitate to work towards resolving your debt. The Plan consists of your Monthly Contribution Amount, the timeframe to get out of debt and the Goal (total amount of payback) you select.
Rejected Offer: An offer to resolve an account for less than the balance owed that a creditor does not agree to accept.
Resolution: An agreement between a debtor and creditor to resolve an account for less than the current balance.
Secured Debt: Debt that is tied to some asset (usually a car or property) as collateral for the loan. The debt is secured against the collateral.
Settlement Letter/Settlement Agreement: This is the contract between you and the creditor. Once you and the creditor agree on a settlement amount, it is very important the get a letter from the creditor outlining the details of the settlement before you send the settlement payment. The letter should include information like: account balance, amount of settlement, due date of settlement, and language that the settlement amount resolves your account in full.
Settlement Proposal: An offer to or from the creditor to resolve the debt for less than the balance.
Settlement: An agreement between a debtor and creditor to resolve an account for less than the current balance.
Statement: A periodic (usually monthly) statement listing the purchases, payments and other debits and credits made to your credit card account within the billing cycle.
Summons & Complaint: In regards to unsecured debt, a legal notice to a debtor than an action against him or her has begun in the court, typically to enforce a past due account. Should the debtor not respond to this notice within a certain time, it is likely a Default Judgment will be entered.
To Do List: A place within UGotiate where users will receive alerts on items that need attention or action.
UGotiator: A user and/or subscriber of UGotiate. A play on the word Negotiator.
UGuidance Central: A place within UGotiate where users visit to report that something has happened with their creditors. Each time a collection letter or a call is received, the user reports it at UGuidance Central and then they receive guidance and education on how to handle.
UGuidance: Any guidance, education, tips, etc provided within UGotiate.
Unsecured Debt: Debt that is backed only by the reputation or credit record of the consumer and not secured by any collateral security.
Unsolicited Settlement Offer: A settlement offer directly from the creditor that the debtor was not aware was coming. Oftentimes the Unsolicited Offer is included in a Collection Letter. This is very common and you may receive multiple offers from your creditors over time.
UTools: Various tools within UGotiate to enhance the UGotiator’s experience to be unique and customized.
Validation of Debt: Per the Federal Debt Collection Practices Act, a debtor can send a letter to request that a collection agency provides proof of the debt that they are collecting on.
Please sign in to leave a comment.