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






Copyright © 1998-99, National Finance Adjusters, Inc