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Insolvency is a state of financial distress in which a person or entity cannot pay its debts. A company’s insolvency may arise due to various situations that lead to poor cash flow. When faced with insolvency, a company or individual can contact creditors directly and restructure debts to pay them off. Judgment Proof
September 25, 2022 If a person is considered a reliable court, it probably means that he has no assets and no job. 341 Meeting
September 25, 2022 The 341 meeting is an important milestone in the Chapter 7 bankruptcy process. Bankruptcy
September 25, 2022 Bankruptcy is a legal proceeding carried out in order for individuals or legal entities to be freed from their debts, while at the same time providing creditors with the opportunity to repay them. Collection Agency
September 25, 2022 A collection agency is a company that lenders use to recover overdue funds or funds from accounts that are in default. Debt Collector
September 25, 2022 The debt collector is responsible for collecting overdue debts to creditors. Debt Consolidation
September 25, 2022 Debt consolidation is the act of taking one loan to pay off multiple debts. Debtor
September 25, 2022 Debtors are individuals or legal entities that owe money, whether to banks or others. Debtor in Possession (DIP)
September 25, 2022 A debtor in possession (DIP) is an individual or entity that has filed for Chapter 11 bankruptcy protection but still owns property that creditors have legal claims under a lien or other lien. Default Risk
September 25, 2022 Default risk is the risk that a lender takes on if the borrower fails to make the required payments on the debt. Judgment Lien
September 25, 2022 A bond is a court decision that gives the creditor the right to take possession of the debtor’s property if the debtor fails to fulfill its contractual obligations. Keep and Pay
September 25, 2022 Hold and pay is a strategy to preserve an asset while continuing to pay on it even after bankruptcy has been declared. Lien Sale
September 25, 2022 A lien sale is the sale of a claim or hold on an asset to pay off an outstanding debt. Lifetime Cost
September 25, 2022 The lifetime cost of a product or service refers to the total cost of owning it over its lifetime in addition to the initial purchase cost - in business you may hear this called TCO (Total Cost of Ownership). Subordination Agreement
September 25, 2022 In the subordination agreement, priority is given to secured debts that are arranged one behind the other in order to recover the amount of repayment from the debtor in the event of foreclosure or bankruptcy. Wage Assignment
September 25, 2022 Payroll takes funds directly from the employee’s paycheck to pay off debt. 60-Plus Delinquencies
September 25, 2022 An arrears rate of more than 60 is a metric commonly used to measure the number of mortgages that are more than 60 days overdue on monthly payments. Advance Payment
September 25, 2022 Advance payments are made before the goods or services are received. Allowance for Credit Losses
September 25, 2022 A credit loss allowance is an estimate of debt that a company is unlikely to be able to recover. Bad Credit
September 25, 2022 A person is considered to have bad credit if they have not paid their bills on time or owed too much money in the past. Bad Debt
September 25, 2022 Bad debt refers to loans or outstanding debt balances that are no longer considered recoverable and must be written off. Bail-In
September 25, 2022 A guarantee helps a financial institution that is on the verge of bankruptcy by demanding the cancellation of debts to creditors and depositors. Banker's Acceptance
September 25, 2022 Banker’s acceptance is a form of payment that is guaranteed by a bank and not by an individual account holder. Beacon Score
September 25, 2022 The Pinnacle Score is a credit scoring method developed by Equifax. Bridge Financing
September 25, 2022 Interim financing can take the form of debt or equity and can be used at the time of the IPO. Commercial Loan
September 25, 2022 A commercial loan is provided between a bank and a business, used to finance operating expenses and capital expenditures.