COLLECTION AGENCY GLOSSARY

ACCOUNT: a record of debit and credit entries to cover transactions involving a particular person; proof of a debt.
ACCOUNT HOLDER: the person(s) and or guarantor(s) in whose name an Account was established; the person or entity who or which is obligated to repay an Account, or if there are multiple persons or entities obligated to repay an Account, all such persons or entities collectively; the obligor or obligors on an Account.
ACCOUNT SCHEDULE: the schedule setting forth the following information concerning each Account: the Account numbers, the name of the Obligor, and the current balance of each of the Accounts.
AGREEMENT: the Purchase Agreement, including the cover page and all Addenda, Exhibits and Schedules, Confidentiality Agreement and Bid Forms executed by Purchaser and Seller.
ASSIGNMENT: the transfer of property to be held in trust or to be used for the benefit of creditors; the Bill of Sale document assigning title of the receivables to Purchaser.
BANKRUPT: a person judicially declared subject to having his estate administered under the bankrupt laws for the benefit of his creditors; an Obligor on any Account who voluntarily commenced, or against whom there was commenced, any proceeding or petition under any bankruptcy, insolvency or similar law or seeking dissolution or reorganization or the appointment of a receiver, trustee, custodian or liquidator for such person or a substantial portion of such person's property, assets or business or to effect a plan or other arrangement with its creditors.
BANKRUPT ACCOUNT: an account that has been discharged prior to the transfer date in this Agreement; if there are two or more debtors on the same account, all debtors must have been discharged; bankruptcy discharge must be verified by providing a copy of the credit bureau, or discharge, or following information necessary to verify the discharge: attorney name, attorney phone number, and case number.
BANKRUPTCY: the filing by a Petition for Bankruptcy, or the filing against a debtor by his or her creditors of a Petition for Bankruptcy in an U.S. Bankruptcy Court.
BANKRUPTCY, CHAPTER 7: the legal process under Title 11 of the United States Code, commonly referred to as the Bankruptcy Code, by which non–exempt assets of the debtor are liquidated by a trustee to pay creditors and discharge the debtors debts thereby giving him a fresh start.
BANKRUPTCY, CHAPTER 13: the legal process under Title 11 of the United States Code, commonly referred to as the Bankruptcy Code, by which a debtor proposes a plan to pay her creditors in full or in part over a three (3) or five (5) year period. The debtor pays her planned payment to a trustee who disburses the funds to the creditors according to the approved plan.
BANKRUPTCY DISCHARGE: the release, by the Bankruptcy Court, of the debtor from all of his dischargeable debts, whether then payable or not. A permanent injunction against any collection action for pre–filing dischargeable debts. The goal a debtor seeks when filing for bankruptcy protection.
BANKRUPTCY DISMISSED: an order by the Bankruptcy Court terminating a specific bankruptcy case. Creditors may resume collection efforts upon dismissal of the debtor's case.
BANKRUPTCY PROOF OF CLAIM: a form used to file a claim in order to receive payment from a bankruptcy estate. This form instructs and empowers the bankruptcy trustee to forward payment to creditors.
BANKRUPTCY PROOF OF FILING: any Bankruptcy Court generated or endorsed document bearing the debtors name and valid case number. Any verification by Bankruptcy Court personnel that a debtor has filed a case and a case number has been issued. This could be accomplished by phone, fax, writing, or email.
BILL OF SALE AND ASSIGNMENT: a formal instrument for the conveyance or transfer of title to delinquent receivables; the document identifying the assets being transferred from the Seller to the Purchaser, dated and executed by the Seller and the Purchaser.
BORROWER: a person who borrows (ie. money) with the intention of returning the same with interest; see account holder.

CARDHOLDER: see account holder.
CHARGE ACCOUNT: a customer's account with a creditor (as a merchant) to which the purchase of goods or services are charged.
CHARGEOFF: to treat as a loss or expense.
CHARGEOFF ACCOUNT or RECEIVABLE: an account or receivable that has been charged off as a loss on the books and records of the seller as uncollectable in accordance with practices and applicable with Federal Regulations.
CHARGEOFF DATE: the date on which the receivable is treated as a loss or expense against the Seller's books.
CHARGEOFF, FRESH: a chargeoff account that:
(a) is sold or purchased within 30 days of the Originator's chargeoff date,
(b) the Debtor may have been contacted by a direct employee of the originator, and
(c) the Debtor has not been contacted for the purpose of collections by any third party representative, on behalf of the originator, as part of an 'Early–Out' or 'Cure' program.
CHARGEOFF, NEW: a chargeoff account that:
(a) is sold or purchased within 30 days of the Originator's chargeoff date,
(b) the Debtor may have been contacted by a direct employee of the originator, and
(c) the Debtor may have been contacted for the purpose of collections by a third party representative, on behalf of the originator as part of an 'Early–Out' or 'Cure' program.
CHARGEOFF, PRIMARY PLACEMENT: a chargeoff account that:
(a) is sold or purchased after recall from a primary placement collection agency or attorney,
(b)the Debtor may or may not have been contacted for the purpose of collections by any third party representative, on behalf of the Originator, as part of an 'Early–Out' or 'Cure' program,
(c) or the account is being resold by a debt buyer who has made an attempt to contact the debtor, either directly or through a representative, for the purpose of collecting the debt and where the account was defined as a New Chargeoff or Fresh Chargeoff account at the time of purchase by the debt buyer selling the account.
CHARGEOFF, SECONDARY PLACEMENT: a chargeoff account that:
(a) is sold or purchased after recall from a secondary placement collection agency or attorney,
(b) the Debtor may or may not have been contacted for the purpose of collections by any third party representative, on behalf of the Seller, as part of an 'Early–Out' or 'Cure' program,
(c) or the account is being resold by a debt buyer who has made an attempt to contact the debtor, either directly or through a representative, for the purpose of collecting the debt and where the account was defined as a Primary Placement Chargeoff account at the time of purchase by the debt buyer selling the account.
CHARGEOFF, TERTIARY PLACEMENT: a chargeoff account that:
(a) is sold or purchased after recall from a tertiary placement collection agency or attorney,
(b) the Debtor may or may not have been contacted for the purpose of collections by any third party representative, on behalf of the Seller, as part of an 'Early–Out' or 'Cure' program,
(c) or the account is being resold by a debt buyer who has made an attempt to contact the debtor, either directly or through a representative, for the purpose of collecting the debt and where the account was defined as a Secondary Placement Chargeoff account at the time of purchase by the debt buyer selling the account.
CHARGEOFF, WAREHOUSE or ARCHIVE: (a) a chargeoff account that is sold or purchased after the account has been in storage and not received any collection activity for more than 6 months,
(b) a chargeoff account that is sold or purchased after being placed with a quadinary placement collection agency or attorney,
(c) or the account is being resold by a debt buyer who has made an attempt to contact the debtor, either directly or through a representative, for the purpose of collecting the debt and where the account was defined as a Tertiary Placement Chargeoff account at the time of purchase by the debt buyer selling the account.
CHARGEOFF, ZERO AGENCY: a chargeoff account that:
(a) is sold or purchased within 30 days of the Originator's chargeoff date,
(b) the Debtor may have been contacted by a direct employee of the originator,
(c) the Debtor has not been contacted for the purpose of collections by any third party representative, on behalf of the originator, as part of an 'Early–Out' or 'Cure' program, and
(d) the account has not been bought or owned by a debt buyer who has made an attempt to contact the debtor, either directly or through a representative, for the purpose of collecting the debt.
CLAIM: (a) a title to a debt, privilege, or other thing in the possession of another,
(b) demand or legal proceeding.
CLOSING: formally transferring title.
CLOSING DATE: with respect to any Agreement, the date set forth for the transfer of the purchase price to the Seller and the transfer of the accounts to the Purchaser.
COLLATERAL: property pledged by a borrower to protect the interest of the lender.
CONSUMER: person(s) or entity obligated to repay a debt or loan, which is taken for personal or household purposes.
CONSUMER LOAN: a loan or credit, secured or unsecured, which is granted to an individual or individuals for the purpose of financing the purchase of consumer goods or to defray personal expenses.
CONTACT: an actual written or verbal response from the debtor or the debtor's legal representative. An answer phone, nearby, relative, employer or other such individual does not constitute a contact.
CREDIT CARD: a plastic card that accesses a revolving line of credit and that is accepted by a wide range of vendors, is issued and backed by a financial institution and bears the logo and or name of one of the following: VISA, MasterCard, American Express, Discover or Diners.
CURRENT BALANCE: (a) the unpaid balance for each account;
(b) the Account balance, which does not include any finance or late charges assessed after Charge–off Date. The balance may include accrued interest, costs, fees and expenses incurred prior to the chargeoff date. It is possible that payments may be made by or on behalf of any Obligor prior to the cut–off date or the date of this agreement which are not reflected payments made by or on behalf of any Obligor which have been deposited and credited to the Current Balance of such Account, but which may subsequently be returned to Seller or any Servicing Agent uncollected due to insufficient funds, or other reasons.
CUT OFF DATE: with respect to any Account, the close of business on the date set fourth in the Closing Statement.
CUT OFF DATE AMOUNT: with respect to any Account, the outstanding balance of the Account (including principal, finance charges and fees, but excluding any interest accrued after the Account was charged off as uncollectable) as of the applicable Cut–off Date, as shown on the records of the Sellers.
DEBTOR: one who owes a debt, see obligor.
DECEASED: as determined by the date of death or as reported on the Credit Bureau,
(i) Debtor must have been deceased prior to the Closing date of this Agreement,
(ii) if there are two or more debtors on the same account or the debtor is in a non–community property state, and all debtors must be deceased.
DEFICIENCY BALANCE: (a) an amount that is lacking or inadequate, a shortage,
(b) the difference between the original loan amount plus interest less payment to date and net recovery from the auction or sale of the asset.
DEFICIENCY, AUTO: in respect to an auto loan, the difference between the original loan amount plus interest less payment to date and net recovery from the auction or sale of the secured vehicle or property.
DEFICIENCY, MORTGAGE: in respect to a home or real property loan, the difference between the original loan amount plus interest less payment to date and net recovery from the auction or sale of the secured property.
DELIVERY DATE: see Transfer Date.
DOCUMENT: (a) an original or official paper relied on as the basis, proof, or support of a debt,
(b) any application, agreement, billing statement, notice, UCC financing statement from the Debtor to Seller, correspondence, computer generated documentation or other document in a Seller's possession, which relates to an Account,
(c) applications, acceptance certificates, cardholder agreements, accounts or billing statement and balance affidavits.

FILE

a collection of papers, documents, electronic data records (computer) related to an Account.

FRAUD

(a) intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right,
(b) as determined by the date the fraud charge was made.

INELIGIBLE ACCOUNT

(a) any account that is:

(i) Bankrupt (as determined by the Clerk of the Bankruptcy Court stamp),
(ii) Deceased (as determined by the date of death),
(iii) Fraud (as determined by the date the fraud charge was made), and
(iv) Settled (the settlement was received by Seller prior to the closing Date),

(b) any Account which has become uncollectable because:

(i) the Cardholder voluntarily or involuntarily became subject to bankruptcy proceedings before the closing date;
(ii) the Seller Charged–off the account as a fraudulent account;
(iii) any other reason which makes the account legally uncollectable, provided, that such circumstances occurred prior to the date of the closing hereunder, except for Accounts on which on which the applicable statute of limitations has run;
(iv) deceased accounts where the date of death was prior to the closing date; or
(v) any Account which is determined as being handled by a collection agency or attorney either through sale or assignment and sold to Purchaser in error because Seller did in fact recall the Account or any Account retained by Seller, or any Account that has been archived;
(vi) any Account subject to legal guardianship and custodianship.

INTEREST

a charge for borrowed money, generally a percentage of the amount borrowed.

INTEREST RATE

the rate per annum set forth in the applicable Agreement.

LAST CONTACT DATE

the date when the debtor or the debtor's legal representative last responded, either by a written or verbal response, to debt collection action.

LATE CHARGES and FEES

(a) a penalty charged to the account holder when a payment, generally monthly, is not received on or before the due date to which the Debtor has contractually agreed.
(b) costs incurred by the creditor grantor in an effort to collect the payment and for which the Debtor is contractually obligated to pay.

LIEN

a charge upon real or personal property for the satisfaction of some debt; the security interest created by a mortgage; any mortgage, deed of trust, pledge, hypothecation, encumbrance, lien or other security agreement, including, without limitation, any conditional sale or other title retention agreement, and any financing lease having substantially the same economic affect as any of the foregoing, except that statutory and other non–consensual liens will not be Liens.

MEDIA: see Document.
MORTGAGE: (a) a conveyance of or lien against property that is defeated upon payment or performance according to stipulated terms.
(b) the instrument evidencing the mortgage.
NON–COLLECTABLE ACCOUNT: see Ineligible Account
OBLIGOR: (a) one who is bound by a legal obligation.
(b) the current and unreleased obligor(s) on an obligation, including, without limitation, any and all guarantors, sureties or other persons or entities liable on the Account.
OFFICER CERTIFICATE: a certificate from an officer of a party (or, with respect to the Buyer, of the Servicer) certifying that
(i) each of the obligations required to be performed by such party on or prior to the applicable Closing Date pursuant to the terms of the agreement has been duly performed and
(ii) all representations and warranties of such party made under the agreement were true and correct as of the date of the Agreement.
OUTSTANDING BALANCE: see current balance.
PAID IN FULL: see settled in full.
PRINCIPAL BALANCE: is defined as account principal and other legally collectible costs, expenses, and interest accrued prior to the Charge–off Date, less payments or settlements since chargeoff, if any.
PRIVATE LABEL CARD: a plastic card that accesses a revolving line of credit, accepted by a specific vendor, is issued and backed by that vendor, and bears the logo and or name of that vendor.
PURCHASE PRICE: (a) with respect to any Bill of Sale, the aggregate of the Purchase price percentage multiplied by the Cut–off date amount of each Account designated in the Bill of Sale.
(b) the amount bid by Buyer to purchase the Accounts as set forth on the bid Form.

REAGED ACCOUNT: an account that is brought to a current status, even through the total past due amount has not been paid. Typically, the delinquency status is eliminated from the account (either manually or automated) after the customer has paid a predetermined amount, such as three minimum payments (usually two percent of the account balance each month) or one lump sum payment (usually the equivalent of the three minimum payments or six percent of the account balance each month). There is typically a maximum number of 'reages' in the life of an account that is established by company policy.
RECEIVABLE: subject to call for payment.
RECEIVABLES: the uncollected Principal Balances with respect to an extension of credit originally made by Seller or Seller's assignor to one or more debtors as evidenced by a promissory note or other written instrument.
RECOVERY RATE: the calculated percentage (based on the gross dollars of the original chargeoff pool of accounts including fraud, deceased, bankruptcies and disputes) of the gross dollars paid by the debtors to the owner(s) of the debt.
RECOVERY RATE CALCULATION: Gross Dollars Paid divided by Gross Dollars of Chargeoff Pool, see Recovery Rate.
REPAYMENT: a copy of cancelled checks, receipt(s) or a document from Seller acknowledging proof that the debt has been paid in full.
RETAIL CARD: see private label card.
SETTLED IN FULL: the Debtor has satisfied the Account obligation with full payment of the amount due.
SETTLEMENT: (a) payment of the adjustment amount of an account, including principle, interest and fees;
(b) a copy of a written settlement agreement or other written documentation evidencing a settlement.
TRANSFER –: conveyance of right, title, or interest in real or personal property from one person to another; removal or acquisition of property by mere delivery with intent to transfer title.
TRANSFER DATE: the date upon which Seller transfers the Accounts to Buyer and makes available for pick–up by or delivery of the Account Documents to Buyer.
UCC: the Uniform Commercial Code as in effect in the applicable state.
UCC FINANCIAL STATEMENT: a financing statement listing asset(s) and filed with the Secretary of State to perfect ownership in the asset(s)
UNCOLLECTABLE ACCOUNT: see Ineligible Account.