Collections and Recovery

Collection letter means a written communication from a collector or creditor seeking payment or giving required collection information.

Debt Collection Rule means the CFPB rule framework that clarifies and implements federal FDCPA debt-collection requirements.

Debt collector means a person or company that regularly collects past-due debts owed to others.

Limited-content message means a Debt Collection Rule voicemail that gives only limited callback information without describing the debt.

Original creditor means the company that first extended the credit or loan to the borrower.

Right-party contact means a collector has reached the consumer or authorized person connected to the debt rather than an unrelated third party.

Cease communication means a consumer directs a collector to stop most further collection contact.

Collection agency means a business that tries to recover unpaid debt on behalf of a creditor or after buying the debt.

Debt buyer means a company that purchases unpaid debt and then seeks to collect on it.

Collector-verification process that gives a consumer enough information to understand and assess a claimed debt.

Deficiency balance means the remaining debt still owed after collateral is taken and sold for less than the amount due.

Garnishment means a process that directs part of a debtor's income or funds toward debt recovery.

Payment arrangement means an agreed plan to repay overdue debt over time instead of all at once.

Recovery rate means the share of a defaulted or charged-off balance that a creditor or collector is able to recover.

Repossession means the lender's recovery of pledged property after serious nonpayment on secured debt.

Settlement offer means a proposal to resolve a debt for less than the full claimed balance.

Third-party collection means debt-collection activity performed by a separate collector rather than the original creditor.

Validation notice means the collector's written notice identifying the debt and explaining the consumer's basic validation-related rights.