Glossary of Terms
Abstract -- A
legal document that provides a summary. For example, an Abstract
of Judgment.
Acceleration
-- An acceleration clause in a contract makes the entire debt come
immediately due because of a failure to complete certain contractual
obligations.
Actual Cash
Value-- The fair, usual or reasonable cash price that something
will bring on the open market. Also known as "fair market value".
Additional
Insured-- Someone other than the primary insured, who will
benefit from an insurance policy.
Add-on
-- More goods bought before old goods are paid for; the contact
for the original goods is rewritten to include the new things.
Adjudicate,
Adjudication-- The formal pronouncement of judgment in a
law suit.
Adjustor
-- The person who is either working on collecting delinquent payments
or repossessing the vehicle.
Administrator
-- A person appointed by the court to handle the estate of a deceased
person.
Advisement
-- A judge who takes a cause under advisement postpones making a
ruling until a later time.
Affidavit
-- A written statement sworn to before a person officially permitted
by the law to administer an oath.
Agency
-- When a person is given agency authority, he is given the legal
right to act for another.
Agent --
A person authorized to act for another.
Amortization
-- Paying off a debt in regular and equal payments. It is the total
interest for the term of the loan plus the principal, divided by
the number of payments.
Annual Percentage
Rate (APR)-- The percentage that a borrower is actually
paying for the use of money borrowed, expressed in a standardized,
yearly way.
Appraisal
-- The estimated value of something by an impartial expert.
Arbitration
-- A meeting ordered by the court where an appointed arbitrator
negotiates a binding settlement between disputing parties.
Articles
of Incorporation-- The document that sets up the onset and
purpose of a corporation.
As Is
-- Selling something "As Is" means the seller makes no
promises other than as seen and described. The buyer takes the risk
of a possible defective condition.
Assets
-- All money, property, and receivables owned by a person or organization.
Assigned
Risk-- A type of insurance that insurance companies handle
only because state law requires it. The insured is usually a poor
risk and typically is charged higher premiums because of it.
Assumption
-- The taking over of a debt by another party.
Attachment
-- A legal writ of process used to legally seize the property of
another. Also, to take funds from the hands of a third party who
is liable to pay it over.
Auction
-- A sale where items are offered, one at a time for purchase, under
certain conditions. They may be fully or partially guaranteed, or
strictly "As Is". Either oral or written bids are accepted
continuously until the item is purchased by the highest bidder.
Auction House
-- A term used to describe business which specializes in selling
property via auction.
Audit
-- To examine or verify accounts or records.
Bailee
-- A person to whom the property of another is loaned, leased or
otherwise entrusted.
Bailment
-- Delivery of property by the owner to another for a set length
of time. To temporarily hold in trust to carry out a specific purpose
and then give the property back to the owner. A lease is a type
of bailment.
Bailor
-- The owner of property entrusted to another under a bailment.
Balance Sheet
-- A summary of a company or individual's assets, liabilities, and
net worth.
Balloon Payment
-- The last payment of a loan that is much larger than any of the
other regular payments.
Bankruptcy
-- Under the Federal Bankruptcy Act, a financially troubled debtor
places his assets in the court's care. Assets may be liquidated
to pay bills, payment schedules restructured, or debts discharged
altogether. While the bankruptcy proceeds, the debtor is protected
from creditors by the Automatic Stay.
Bid
-- An offer to purchase in a specific dollar amount and under specific
conditions.
Bidder
-- The person who offers a bid.
Blocked In
-- A slang expression used to describe a vehicle assigned to be
repossessed, which when located has both the front and back of it
pressed against some unmovable object. This condition can effectively
temporarily prevent the repossession.
Blown Ignition
-- A slang expression used to describe a vehicle's condition when
the ignition locking mechanism has been removed and not yet replaced.
Book Value
-- Commonly, wholesale value. Also net worth as recorded on a financial
statement.
Breach
-- Breaking a law or failing to perform a contractual duty.
Capital
-- Total funds invested in a business.
Capitalized
Cost-- The total amount set by the lessor as the value of
the goods leased. This amount is the basis for all calculations
of payment amount, interest costs, and sales tax.
Cause of
Action-- Facts sufficient to support a valid lawsuit.
Certified
Check-- A check that a bank has marked as "guaranteed
cashable" for its customer.
Charge-off
-- Recognizing a loss on an uncollected debt in a company's records.
Also called "write-off".
Chattel
-- An article of tangible property other than real estate.
Clear Title
-- Ownership that is free from all doubt.
Closed-Ended
Lease-- A kind of lease where the lessor assumes all risk
of the value of the goods, including the decline in market value
caused by depreciation, except losses caused by the negligence of
the lessee. Also known as a true lease, straight lease, flat rate
lease, or a non-participating lease.
Collateral
-- Tangible property that's ownership is given to a lender as a
guarantee of fulfillment of an obligation. In the event of default,
the lender may repossess and dispose of that property and apply
the proceeds from the sale to offset his loss and the debtors balance.
Also, called "security".
Collect
-- To receive payment on a delinquent debt.
Collector
-- A person who specializes in routinely initiating the receipt
of payment from delinquent debtors.
Co-maker
-- Any additional person who signs promising to pay a contractual
obligation.
Commercial
Paper-- All negotiable instruments related to business.
Complaint
-- The first document filed in a lawsuit stating the wrong done
to the plaintiff by the defendant, and requesting specific help
from the court.
Conditional
Sale-- A sale under contract which requires performance
of a condition prior to the passage of title for the thing sold
to the buyer. Usually this requires payment of the entire purchase
price by the buyer.
Confession
of Judgment-- The act of a debtor permitting judgment to
be entered against him by his creditor, for a stipulated sum without
legal proceedings of any kind. This is usually a written statement
contained within a Judgment Note.
Conflict
of Interest -- The condition of being in a position where
your own needs or desires may cause you to violate your duty to
those who have a right to rely on you.
Conservator
-- Guardian or preserver of property appointed for a person who
cannot responsibly handle it alone.
Consign,
Consignment-- To hand over things for transportation or
for sale, while retaining ownership such as with using an Auction
House to sell cars.
Constant
Yield Method-- A method of computing the interest rate on
an installment contract or lease that provides earnings to the lender
at a steady rate.
Consumer
-- A person who buys something for personal use.
Contact to
Collect-- Slang sometimes used to describe a lender sending
an adjustor to make contact with the debtor at his location for
the purpose of gathering information and collecting delinquent payments.
Contract
-- An agreement between two or more people, or entities to do, or
refrain from doing, something.
Conversion
-- Any act which deprives an owner of property without that owner's
permission and without just cause.
Creditor
-- One to which a debt is owed.
dba
-- Doing business as.
Debt
-- An obligation owed by one to another.
Debtor
-- One who owes a debt to another. This can be a person, company,
government, or any entity.
Default
-- A failure to do, pay, or finish something as required by the
terms of a contract.
Deficiency
-- A lack or shortage. The difference between what is owed and what
has been paid.
Delinquency,
Delinquent-- Overdue, falling behind on payments on a debt.
Failure, omission, or misconduct.
Demand
-- A forceful claim that presupposes that there is no doubt as to
its winning. The assertion of a legal right.
Deposition
-- A witness' sworn testimony, taken with lawyers present, out of
court.
Depreciation
-- Reduction in worth due to deterioration or passage of time.
Detail
-- Commonly used to describe the cleanup and other in depth reconditioning
of a used car.
Direct Loan/Lease
-- A loan or lease made directly to the borrower by the lender without
a dealer or broker.
Discharge
-- Release, remove. To discharge a contract is to end the obligation.
Discharge in bankruptcy is to release a person or firm from their
debts.
Discovery
-- The formal and informal exchange of information between sides
in a lawsuit through interrogatories and deposition.
Dismissal
-- In bankruptcy a dismissal is a court order to put the filing
out of court as if it never happened. Other lawsuits may be dismissed
"with prejudice" or "without prejudice".
Down Payment
-- The initial cash payment made when buying something on an installment
contract.
Draft
-- A negotiable instrument for the payment of money drawn by one
person to another.
Drive By
-- A slang expression for a field agent passing by an address looking
for a vehicle which has been assigned to be repossessed.
Duces tecum
-- Latin for "Bring with you". A type of subpoena that
requires production of records, either in person or by mail.
Duck, A Sitting
-- A slang expression used to describe a vehicle which has been
assigned for repossession which is sighted the first time the location
is checked in an easily accessible position. An easy repo.
Embezzlement
-- Taking of money or property by someone who has been entrusted
with taking care of it.
Endorse
-- To sign giving agreement to something or to the back of a negotiable
instrument making it payable. To give approval, support or sanction
to something.
Endorsement
-- The act of endorsing something or the signature itself.
Equity
-- Ownership interest in property over and above what is owed on
it. Also, being treated fairly in a certain situation.
Equity of
Redemption-- The right of the debtor to redeem the collateral
after it has been forfeited or repossessed due to a default in the
contract. The redemption is on the condition of paying the full
amount of the debt, interest and costs.
Escrow
-- Something promised to be delivered by one person to another,
is held by a third party until some condition or obligation is performed.
Once the requirement is met, delivery is completed.
Estate
-- The property left by a person who has died. Also, the right of
a living person to certain property.
Ethics
-- Standards of fair and honest conduct.
Evidence
-- Any documentation, objects or testimony presented during a legal
proceeding.
Execute
-- To sign a document. Also, to complete performance.
Executor
-- Someone chosen by a person who is making out a will, appointing
that person as responsible for carrying out its terms.
Executory
-- Something unfinished or not yet fully performed.
Extension
-- Allowing extra time for the payment of a debt or the term of
a contract or lease.
Fair Credit
Billing Act-- Established procedure consumers can use to
resolve credit account billing errors.
Fair Credit
Reporting Act-- Governs all granters of consumer credit
and all local retail credit bureaus.
Fair Market
Value-- See "Actual Cash Value".
fdba
-- Formerly doing business as.
Fee
-- Any charge for services rendered.
Fiduciary
-- A trust relationship of one person acting on behalf of another.
Field Call
-- Slang sometimes used to describe a lender sending an adjustor
to make contact with the debtor at the debtor's location. This can
be for the purpose of collecting money or simply asking him to get
in touch with the lender.
Finance Charge
-- Total of all costs the customer must pay for obtaining credit.
Financial
Statement-- A complete summary of what a person or company
owns and owes.
Flake
-- A common slang expression used to describe an unreliable payer.
Flat-Bed
-- A type of tow truck which provides a flat surface for
the towed vehicle to ride on without touching the roadway.
Floor Price
-- The lowest acceptable purchase price, set by the seller, for
the sale of something.
Foreclose
-- To end someone's right to property because of their failure to
perform the terms of the contract.
Forfeit --
To lose a right to something due to some failure.
Forgery --
Altering or faking a document for the purpose of fraud.
Fraud
-- Cheating someone by using deceit or trickery.
Garnishee
-- One who is in possession of that which is subject to garnishment.
Garnishment
-- A legal proceeding whereby property, money or credits of a debtor
are applied to payment of the debt, by means of an order of a court.
Garnishor
-- One who initiates a garnishment against a judgment debtor.
Good Faith
-- Acting honestly. Following reasonable standards for fair
dealing set by law and the business community.
Goods
-- Any moveable personal property.
Goodwill
-- Reputation for a product or service standard. A company's value
over and above the physical property and accounts receivables.
Grace
-- Delaying demand for payment or performance of some other contractual
obligation.
Grace Period
-- A short period of time that an insurance policy stays in effect
after payment of premium was due. Debtors sometimes mistakenly think
this period also applies to the payment of other types of debts.
Gross Income
-- Total income before any debts are deducted.
Guarantee,
Guaranty-- A merchant's promise that goods are of a certain
quality, and that if not, he will fix or replacement them for a
certain time frame. Also, a promise to perform an obligation along
with the primary obligee.
Guarantor
-- One who gives his guaranty.
Guardian
-- Someone who has the right and duty to take care of another since
that person is not capable.
Hearing
-- A court or trial-like proceeding.
Hold Harmless
-- To agree to defend or pay claims that might arise against someone
else.
Honor
-- To pay on a negotiable instrument.
Illusion
-- A type of concealed towing unit used by repossessors.
At the push of a button, it quietly converts what appears as a normal
pickup into a full-blown tow truck in 16 seconds. It then, hydraulically,
lifts the vehicle in 3 seconds.
In Pro Per
-- In Properia Personn; Latin term meaning acting as your
own attorney.
In Re --
Latin prefix meaning "in regard to" used in naming some
lawsuits.
In The Barn
-- A slang expression which means the vehicle has been successfully
repossessed.
Income
-- All funds received by someone from whatever source.
Incorporate
-- The formal process required to form a corporation. Also, to blend
something into something else.
Indemnify
-- To make whole, compensate or reimburse for a some liability.
Indemnity
-- A contract, or insurance policy that compensates for a particular
type of potential loss.
Independent
Contractor-- One who contracts with another to do a particular
piece of work. The contractor works completely under his own control
and direction.
Indirect
Loan/Lease-- A loan or lease made to a borrower by a third
party and then sold to a lending institution.
Injunction
-- A court order requiring a person to do or not do something. This
is usually temporary until a full court hearing can be held.
Insolvent
-- When one cannot pay his debts as they become due, and his debts
exceed his assets.
Installment
Loan or Note-- A promise to pay a specific amount over a
specific period of time under certain terms. The principal is paid,
together with interest on the unpaid balance until the note is paid
in full.
Instrument
-- Any written document.
Insurance
-- A contract under which someone pays money to a company that promises
to provide certain protection or reimburse him if he suffers a loss
for a particular thing or on a particular item.
Insurable
Interest-- The person or thing that is being insured. Also,
the real dollar value of someone's claim in a particular thing.
Insured --
The person who will benefit from the terms of an insurance policy.
Insurer --
The company providing the insurance coverage.
Interest
-- An increase or addition over the amount owed paid for the use
of the money. The rate of the payment is expressed as a percentage
per unit of time.
Interrogatories
-- Written questions to get factual answers that are addressed to
any witness in either side of a lawsuit.
Judgment
-- A debt or other obligation resulting from a court order granted
after a legal proceeding.
Judgment
Creditor-- The one that money is owed to as a result of
a judgment.
Judgment
Debtor -- One who owes a debt to another by court order.
Judgment
Note-- A promissory note containing an authorization to
any attorney, or the holder, or the Clerk of the Court, to enter
an appearance for the maker and confess judgment against him, if
he defaults, for a sum named in the note.
Kick-In
-- A slang expression used by those in the collection industry to
describe making contact with individuals for information, at a location
previously only under surveillance. The term does not mean physical
violence.
Lease
-- An extended rental agreement which gives a person the use of
a product or object of value without owning it.
Lenders Single
Interest-- A type of insurance coverage (LSI) that protects
only the lender, covering the collateral on a loan.
Lessee
-- Someone who has a lease for something.
Lessor
-- The person, or business entity, who grants a lease to someone.
Levy --
To seize or collect.
Lien
-- A claim against property which is allowed by the law as security
for repayment for a debt.
Lienholder
-- One who holds a lien or the owner of mortgaged property.
Line of Credit
-- The limit of the amount of money a lender will give a particular
customer.
Loss Payee
-- The person or company designated as the one to receive payment,
in the event of a claim on an insurance policy.
Maker --
The person who signs a negotiable instrument.
Mark-up
-- A lessors additional amount included in the capitalized cost
of the lease for profit. The markup is a method of defraying costs
incurred by the bank in acquiring the property before any income
is realized from the lease.
Maturity
-- Expiration date of a note or lease.
Mechanics
Lien-- A type of lien created by statute in most states,
which exists for those who have performed work on a motor vehicle.
The lien attaches to the vehicle and is intended to make sure that
person gets paid.
Minor --
A person who is under the statutory age of legal competence, usually
18 years old.
Money Factor
-- The anticipated cost of the lessor's loan to acquire the
personal property to be leased. This cost is built into the capitalized
cost.
Nailed The
Car -- A slang expression meaning that the car has successfully
been repossessed.
Negotiable
Instrument -- A properly executed document that contains
an unconditional promise to pay an exact sum of money either on
demand or at an exact time in the future. For example checks, promissory
notes, car loans and leases.
Networking
-- The skill of developing diverse contacts over an extended period
of time, which may provide sources to help you at a later time.
Non-Recourse
-- A transfer of a contract from the seller to the lender, with
the lender assuming the risk for loss if the loan defaults.
Note
-- A contract under which someone promises to a certain sum of money
at a certain time.
Notice
-- To be given knowledge of certain facts.
On Demand
-- A phrase found in negotiable instruments that means money owed
must be paid immediately when requested by the holder.
Personal
Property-- In collections, usually refers to the personal
items contained in a repossessed vehicle. These items, which are
not part of the car, should be inventoried and retained for a limited
period of time for redemption by the debtor.
Pick The
Lock-- The ability to turn on a locking mechanism without
the benefit of the key. This is accomplished by repossessors and
locksmiths through the skillful use of tools called picks.
Picked Up
The Car-- A slang expression meaning that the vehicle has
been successfully repossessed.
Pick-Up Payments
-- Additional payments which are incorporated into the first few
months of a contract to make up a shortfall on the downpayment required
on a loan.
Popped The
Car-- A slang expression meaning that the vehicle has been
successfully repossessed.
Post-date
-- To date something with a future time. A post-dated check cannot
be cashed until that time arrives.
Power of
Attorney -- A signed and dated document authorizing one person
to act on behalf of the person signing.
Premium
-- The money paid on an insurance policy.
Principal
-- The original sum of money loaned.
Pro bono
-- Latin meaning "for the public good". A lawyer doing
pro bono work is donating his time.
Pro se
-- Latin meaning "for himself". A person acting as their
own attorney is pro se.
Promissory
Note -- A negotiable instrument under which a person promises
to pay a certain sum of money over a certain period of time.
Quid pro
quo-- Something for something, very useful in skiptracing.
Also, see Networking.
Quick Hook
Wrecker-- A type of tow truck commonly used by repossessors.
Recourse
-- The right of a lender to collect from the seller of an
installment credit obligation, such as a car dealer, in the event
that the loan defaults. With recourse deals, repossessed vehicles
are usually delivered back to the selling dealer.
Redemption
-- In collections, usually refers to the debtor reinstating
the loan or lease, following repossession of the vehicle, by paying
arrearage and costs.
Release
-- A document used in settling claims under which a person gives
up a certain legal right or claim in exchange for something, such
as money or property.
Replevin
-- A lawsuit used to recover possession of something from someone
else. Repossession through the courts.
Repo, Repossession
-- To take back collateral on an installment loan or lease, because
of a default such as payments not being made.
Repossessor
-- A specialized businessperson who possesses the technical training
and skill required to retake vehicles and other mortgaged collateral
from defaulted debtors on behalf of the lender.
Rescind,
Rescission-- To take back or "unmake" a contract
as if it never took place.
Residual
Value-- The anticipated market value of the goods at lease
maturity. Lessors carefully project the residual based on previous
experience with that particular product and anticipated economic
factors. This amount is reached by amortizing the capitalized cost
by a portion of each monthly rental over the life of the lease.
Roach --
A slang expression used to describe a vehicle which is in poor or
abused condition.
Rolling Total
-- A slang expression used to describe a vehicle which, despite
extensive physical damage, continues to operate.
Security
-- Collateral. Something given to the lender as pledge of
repayment, fulfillment of a promise, a guarantee.
Self-Help
Repossession-- Repossession of the collateral or security
for an installment loan or lease, by peaceful means, without notice
or opportunity for a court hearing.
Self-Insured
-- To put money into an account ahead of time, to be used to pay
any potential claims as they come up.
Skiptracing
-- The art or skill of locating an individual who cannot
be found by normal means. See Networking and Quid pro quo.
Sled
-- A slang expression used to describe a vehicle which is old, or
is in poor or abused condition.
Sled-lot
-- A used car lot that finances their own contracts.
Snagged The
Car-- A slang expression meaning that the car has been successfully
repossessed.
Soldiers'
and Sailors' Civil Relief Act -- A Federal law passed during
World War II that protects military personnel from creditors under
certain circumstances.
Spotted The
Car-- A slang expression meaning that the vehicle has been
sighted at an unexpected location.
Stake-out
-- A term used by repossessors to describe staying at a location
to observe activity.
Statute of
Limitations-- A law that sets the maximum length of time
that can pass before a lawsuit is filed, after something has happened.
Stole The
Car -- A slang expression meaning that the vehicle has been
successfully (and legally) repossessed.
Straw Deal
-- A phoney or false deal.
Subcontractor
-- A person who contracts to do a part of job for another, who contracted
for the whole project.
Subpoena
-- An order by the court for a person to appear and testify or present
evidence at a certain place and time.
Surrogation
-- Substituting one person for another who is owed a debt.
Term
-- The length of time something is to run, such as a contract.
Title
-- A document showing the formal right of ownership for property.
Total --
A slang expression meaning that the vehicle has sustained extensive
physical damage. It would, in fact, cost more to repair it than
the vehicle would be worth in a repaired state.
Transformer
-- A type of tow truck used by repossessors which looks like
a normal truck but can be quickly transformed into a tow truck.
Underwriter
-- Same as Insurer.
Uniform Commercial
Code-- This body of laws have been adopted by most states
and are a rewriting of the old law into a simplified uniform format
for better business practices and procedures.
Unit --
In collections, a term used to refer to the vehicle or other collateral
for the loan or lease.
Usury Rate
-- A rate of interest that exceeds the legal limit.
Venue
-- The area where a case can be appropriately tried.
Warranty
-- The seller promises the buyer, at the time of the sale, to back
his product for a period of time under certain conditions. If a
defect or malfunction occurs, the seller agrees to replace or repair
the product.
Wildman
-- A slang expression used to describe an angry debtor.
Without Prejudice
-- Lawsuit may be brought again by the same persons on the same
subject following dismissal.
With Prejudice
-- Lawsuit may not be brought again by the same persons on the same
subject following dismissal.
Wrecker
-- Slang for tow truck.
Write-off
-- See "Charge-off".
Contributing Authors
James W.
Keeley is one of the most prominent attorneys in the Southwest.
He has served as General Council to the bankruptcy trustee in several
cases of national importance.
As General Council for National
Finance Adjusters, Mr. Keeley has done extensive research on every
aspect of repossession, replevin, and bankruptcy procedures throughout
the country.
He is licensed in the United States
Supreme Court, United States Court of Appeals for the Tenth Circuit,
United States District Court for the Northern, Eastern and Western
Districts of Oklahoma, Supreme Court of Oklahoma and all other Oklahoma
State Courts.
Education:
Bachelor of Science in Criminal Justice, Magna Cum Laude, Arizona
State University. Juris Doctorate, University of Tulsa.
Experience:
1982-84 Assistant District Attorney, Tulsa County.
1984-present Private practice with law firm of Gill and Keeley;
emphasis in bankruptcy and commercial law.
Carol E. Hill is Assistant Vice President of Union Bank in
charge of Collections, Collateral Recovery, Asset Sales, and Loss
Recovery at their Auto Lease Center in Orange, California. She has
been in this field of banking for eleven years.
She began her career in 1971 with
a large used car outlet in Long Beach, California. They carried
their own installment contracts and specialized in lending to those
who could not otherwise secure credit. It was there that she learned
collections, skiptracing, and repossessions.
Her experience has been somewhat
unique, since, years later, she became owner and operator of a repossession
agency. This gives her the ability to see situations from both the
lender's and the repossessor's perspective. She was licensed in
California as a Repossessor for many years.
She is an Affiliate Member of the
California Association of Licensed Repossessors (CALR) and has been
a guest speaker for that organization on several occasions as well
as various other groups.
Printed in the United States of America. All rights reserved under
International Copyright Law. Contents may not be reproduced in whole
or in part in any form without the express written consent of the
Author.
The
Repossession Process
Copyright 1990 by Jack S. Barnes
1133 N. Utica
Tulsa, Oklahoma 74110