Debt Collection Glossary
59 terms you’ll meet when you manage past-due business accounts, from aging reports and placement to judgments, liens and writs. Where it helps, each entry links to a longer guide.
A–C
13 termsAccord and Satisfaction
An agreement to settle a disputed debt for a different amount, completed when the creditor accepts the payment. Cashing a check marked “paid in full” can create one.
Before you cash a “paid in full” checkAccounts Receivable (A/R)
Money owed to your business for delivered goods/services but not yet paid.
See how commercial collections workAging Report
A list of unpaid invoices grouped by how long they’ve been outstanding (e.g., 0–30, 31–60 days). Your roadmap for priorities.
When to place a past-due accountAmicable Collections
Professional, non-legal outreach designed to resolve balances while preserving relationships.
Our collection processAsset Search
Research into a debtor’s bank accounts, real estate, vehicles and other assets, usually after a judgment, to find what can be collected.
Judgment collectionsAttorney Demand Letter
A formal letter from a law firm requesting payment and outlining next steps if unpaid.
Litigation collectionsAutomatic Stay
In bankruptcy, a court order that immediately stops most collection actions against the debtor, including calls, letters and lawsuits.
When a customer files Chapter 11Charge-Off (Write-Off)
An accounting event where a creditor writes a debt off as unlikely to be collected. Collection efforts may continue.
Commercial Debt (B2B)
A business owes another business (vs. consumer/household debt).
Common types of small business debtContingency Fee
“No recovery, no fee.” The agency’s compensation is a percentage of amounts collected.
Credit Memorandum (Credit Memo)
A document reducing the amount a customer owes (e.g., for returns or billing corrections).
Credit Policy
Your rules for extending credit (terms, deposits, limits). Strong policies reduce future collections.
Extending credit to startupsCustomer (Debtor/Account Debtor)
The business that owes the balance.
D–H
11 termsDays Sales Outstanding (DSO)
The average number of days it takes to collect payment after a sale. A rising DSO is an early warning sign for cash flow.
Debtor Examination
A court-ordered hearing where a judgment debtor answers questions under oath about income and assets. The name and process vary by state.
How to start the judgment collection processDemand Letter
A written request for payment specifying amount due and how to resolve.
Dispute
A debtor’s claim that all or part of a balance is incorrect. Requires documentation and timely response.
Domestication of a Judgment
Registering a judgment from one state in another state so it can be enforced where the debtor or its assets are.
Judgment collectionsDunning Notice
A sequence of increasingly firm payment reminders.
FDCPA (Fair Debt Collection Practices Act)
Federal consumer-debt law governing third-party collection conduct. While commercial collections differ, many agencies align practices to its spirit.
Consumer collectionsFOTI Message
A voicemail that satisfies disclosure requirements without revealing sensitive info to third parties.
Garnishment
Court-authorized withholding of funds (e.g., from bank accounts or wages) to satisfy a judgment—subject to state rules.
Judgment collectionsGoodwill Adjustment
A voluntary reduction or concession to preserve a valuable relationship.
Guaranty / Personal Guarantee
An individual or entity promises to pay if the primary debtor does not.
When a personal guarantee helps you collectI–N
9 termsInterest (Contractual/Statutory)
Additional amount owed based on contract terms or applicable law.
Judgment
A court decision that a debtor owes a specific amount. Enables post-judgment remedies.
How to start the judgment collection processJudgment Lien
A lien recorded against a debtor’s property based on a judgment.
Judgment collectionsLevy
Court-approved seizure of assets (e.g., bank funds) to satisfy a judgment.
Lien
A legal claim on property as security for a debt.
Mechanic’s Lien
A lien that contractors and suppliers can file against a property they improved when they are not paid. Deadlines are short and vary by state.
Mediation
A facilitated settlement discussion led by a neutral third party.
Net Terms (e.g., Net 30)
Number of days a customer has to pay after invoice date.
Non-Sufficient Funds (NSF)
Returned payment due to inadequate funds.
O–R
10 termsOutreach Cadence
Structured schedule of contacts (letters, calls, emails) designed to resolve the debt efficiently.
Payment Plan
Installment agreement with clear dates, amounts, and consequences for missed payments.
Negotiating with debtorsPCI / HIPAA
Security/privacy frameworks relevant to handling payment data (PCI) or medical information (HIPAA) in specific industries.
Placement
Transferring an account to a third-party agency to collect.
Submit an accountPO (Purchase Order)
Buyer’s written authorization to purchase—often key evidence supporting an invoice.
POD (Proof of Delivery)
Documentation confirming goods/services were delivered or completed.
Promise to Pay (PTP)
A debtor’s commitment to pay by a specific date/amount; tracked for follow-through.
Proof of Claim
The form a creditor files in a bankruptcy case to be considered for payment from the debtor’s estate. Courts set a deadline for filing it.
When a customer files Chapter 11Re-Aging
Altering an account’s delinquency date. Inappropriate re-aging can be misleading—use with care per policy/law.
Right-Party Contact (RPC)
Confirmed communication with the correct decision-maker.
S–Z
10 termsSettlement
Creditor agrees to accept less than the full balance—often for immediate, guaranteed payment.
Negotiating with debtorsSkip Tracing
Research to locate a debtor or updated contact details.
Small Claims Court
A court for lower-dollar disputes with simplified procedures—limits vary by state.
Litigation collectionsSOL (Statute of Limitations)
Time limit for initiating legal action. Varies by state, contract type, and facts.
Statute of limitations on debt collectionStipulated/Consent Judgment
A judgment both parties agree to, usually as part of a settlement.
Suit Recommendation (Suit/No-Suit)
Agency/attorney opinion on whether a file is suitable for litigation.
Litigation collectionsUCC Filing (Uniform Commercial Code)
A public filing (UCC-1) securing a creditor’s interest in a debtor’s collateral.
Venue
The proper court/location for legal action.
Verification / Validation
Providing information to substantiate a debt upon request (context and requirements vary).
Writ of Execution
Court order authorizing enforcement actions (e.g., levy) after judgment.
Judgment collectionsProcess & reporting
6 termsAccount Manager
Primary contact managing your placed accounts and updates.
Audit Trail
Chronological record of contacts, documents, and actions on an account.
First-Contact Time
Speed from placement to initial contact—often correlated with recovery rates.
KPIs (Key Performance Indicators)
Metrics like recovery rate, time-to-resolution, promise-kept rate, dispute rate.
Remittance
Collected funds sent to the creditor on a defined schedule.
When you receive collected fundsVendor Governance
Periodic review of agency/attorney performance, documentation quality, and outcomes.
No terms match your search. Ask us and we’ll explain it.
A placement-ready packet—contract or PO, invoices and ledger, proof of delivery and contact history—shortens the time to resolution.
The longer an invoice goes unpaid, the harder it usually is to collect. Many businesses set a fixed point, such as 60 or 90 days past due, to decide when to place an account.
A signed contract or PO plus proof of delivery is often the quickest way to answer a “we never agreed to that” dispute.
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This glossary is for general information only and is not legal advice. Requirements vary by state and situation; consult qualified counsel for jurisdiction-specific questions.