Cash-Out Refinance
The restructuring of a mortgage loan for a larger amount than the remaining sum. The difference is cashed out by the borrower. A popular method of paying off multiple debts, a cash-out refinance converts unsecured credit card debt into a secured loan using the debtor's real estate property as collateral.

Certificate of Deposit (CD)
A certificate issued by a bank on a time deposit of a certain amount of money. A CD accrues interest over a specified term and fixed maturity date, similar to a savings account but with higher interest and penalties for early withdraw.

Chapter 13
The chapter of the bankruptcy code involving the adjustment of debts to allow the debtor to repay creditors over a three- to five-year period. Debtors who don't qualify for Chapter 7 are transferred to Chapter 13 bankruptcy.

Remains on credit record for seven years
Filer enters a debt repayment plan
Must direct all disposable income toward creditors
Filers income determines the amount paid on debt

Chapter 7
The chapter of the bankruptcy code that liquidates assets of a debtor to pay off creditors and discharge debts. Below lists some of the key points involved in a Chapter 7 bankruptcy case:

Remains on credit record for 10 years
Proceeds from liquidation given to creditors
Allowed to file once every six years
Strict rules to qualify, must pass the "means test"

Closed-End Credit
An advancement of money at a fixed amount in which the borrower agrees to repay the entire principal and interest over a predetermined period. Payments are made in fixed installments, and the credit may be secured or unsecured.

Collateral
A valuable asset or property pledged by a borrower as security against repayment of a debt. If the borrower fails to repay the debt, the lender receives ownership of the asset. Secured loans use collateral as insurance against repayment.

Commercial Bank
A financial institution that offers consumer and business services such as loans, credit cards and various deposit accounts. Commercial banks offer their services to all people, unlike other financial institutions, such as credit unions which require membership prior to eligibility.

Consolidation Loan
An advancement of money to pay off a combined debt amount, replacing multiple debts with one large loan. Lenders offer specialized consolidation loans to help borrowers pay off debts.

Consumer Credit
A loan or line of credit granted to a consumer to purchase goods and services. Consumer credit can occur in several different forms including open-end credit, installment loans, closed-end credit and single-payment loans.

Consumer Credit Counseling Service
An agency that offers debt management services to help people repay debts while working on behalf of creditors. The service aims at getting the debtor to repay all debts in full. The service also provides educational tools to assist people with debt.