Accounts receivable – A businesses transaction or series of business transactions
that manage the billing of customers who owe money.
Bad debt – In business, this is a fiscal amount of receivables that is considered
unrecoverable.
Bankrupt – A legally declared inability to pay creditors.
Collection agency – Business that charges a fee to collect debt from another
company or organization’s debtors.
Creditor - Party that claims another party owes it some form of capital or
property.
Debtor - An individual or company that owes money to a creditor.
Dunning letter – A series of accounts receivable letters, which escalate in
gravity, detailing the attempts made to collect on an unpaid debt. Often times the use of such
letters serve as a legal requirement for a debt collector when they attempt debt
collection.
FDCPA – Federal Debt Collection Protections Act. This is the primary US law
governing the practice of debt collection.
First party - Refers to an entity that is a subsidiary of the original creditor in
a two party contract.
Third party - An entity that was not one of the two original
parties obligated by a two party contract. Often times, this is an independent debt
collector.
Skiptracing – A debt collection method that a collection agency uses to locate an
individual that has changed locations without satisfying their debt.
