Glossary

If a person has multiple debts, debt consolidation can combine the debts to produce one monthly payment for all of the debts.

An unsecured or secured loan that may be taken out by a borrower to pay off some or all other debts owed.

When a person seeks help with their financial situation, specifically their debts. There are many companies who offer services to help consolidate a person’s debt

When a credit counseling company creates a plan for a consumer in which the consumer pays the credit counseling company rather than their creditors. The

A term that encompasses the managing of debt. This can include a debt management plan, credit counseling, and other means of reducing debt.

A settlement when a creditor accepts a lump sum less than what is owed by the borrower. This is generally harmful to your credit score

In exchange for a fee, debt settlement companies will settle your debts so you don’t have to.

The amount of debt you owe compared to the amount of credit you’ve been given by lenders. The higher the ratio of your debt to

All of a person’s monthly debt payments divided by their gross monthly income. This can be a measurement used by lenders to determine your ability