Common Credit Management Terms

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  • Debt
    Liability on a claim; a specific sum of money due by agreement or otherwise; aggregate of all existing claims against a person or a corporation.

  • Debtor
    One who owes an obligation to another, usually to pay money.

  • Deemed trust
    A trust established by statute, considered to be a trust even though there may be no assets in it. For example, employee source deductions prescribed in the Income Tax Act are deemed to be held in trust for the Crown.

  • Default
    Failure to pay or perform a legal or contractual obligation.

  • Discharge
    The release of a debtor from most debts. A bankrupt's discharge may be automatic, suspended, conditional or absolute. The court may also refuse the bankrupt's discharge.

  • Dividend
    The proportional share of a bankrupt's estate paid out by the trustee to creditors who have proven claims against that estate.

  • Division I Proposal
    An offer made by debtors to their creditors in order to modify their payments. The procedure for a Division I Proposal applies to companies and individuals who want to avail themselves of it. This procedure also allows for a restructure of business debts while the business continues to operate.

  • Division II Proposal (Consumer Proposal)
    A simplified proposal for repayment of debt to creditors, available under the Act to a consumer debtor whose aggregate debts, excluding a home mortgage, do not exceed the amount prescribed in the Act.

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This glossary is presented as a service to our members and the general public. Click on the highlighted letter above and it will take you to the alphabetical section for the term you are seeking. As a new service, we welcome your suggestions to expand our glossary. Think a term should be explained differently? If so, you are welcome to submit the term and its meaning for our consideration. However, you must not do so by violating copyright and other laws. Don't see the term you're looking for? Contact us at geninfo@creditedu.org so we can help you.