Glossary.

A creditor transfers the rights relating to an outstanding receivable to another person. If, for example, a creditor assigns an outstanding receivable to EOS, EOS has the right to receive the outstanding payment from the customer. The payment to the old creditor does not discharge the customer of their debt if the customer has been notified about the assignment.

A legally effective assignment requires an agreement between the assignor (assigning party) and the assignee (the new creditor). The agreement of the customer is usually not required.

The seizure of assets or rights to satisfy a creditor’s monetary claims. This can include wages, bank accounts, receivables, and other tangible or intangible assets.

A document in which a guarantor pledges to assume financial responsibility if the customer defaults, guaranteed by a bill of exchange. The guarantor holds the same responsibility for paying the bill of exchange as the customer.

B2B (business to business) is business between two companies, where a company supplies services or goods to another company. B2C (business to customer) means a company supplies services or goods to private customers.

Bailiffs are persons who are primarily entrusted with enforcement actions for the purpose of settling outstanding debts. Their specific duties and authority vary from country to country.

An order by one party to another to pay a certain amount to the signatory or a third party. An example of a bill of exchange is a cheque, in which an account holder orders their bank to pay the bearer a certain amount.

(See also: aval.)

See assignment.

The collection of financial claims on behalf of a creditor by a debt collection agency.

Defines the transfer of financial claims from a creditor to a third party (including all rights thereto). The new creditor is obliged to notify the customer of the transfer. The customer’s consent is not necessary to effect the transfer.

A contract of order obliges and authorises an agent to perform certain tasks on behalf of the customer (e.g. a mandate by which a customer orders an agent to conduct debt collection on their behalf). The agent generally has a right to receive payment for their efforts and an obligation to conduct the mandate according to the instructions of the client.

A creditor has one or more claims against a debtor or several debtors. If, for example, you ordered clothes from an online shop, then the company that operates that online shop is your creditor.

A company which specialises in collecting outstanding receivables on behalf of the creditor. The requirements which a DCA has to fulfil vary from country to country. As a reputable company, it is of great importance to EOS to comply with all applicable legislation and requirements.

A creditor sells a receivable, including all rights pertaining to such receivable, to a third party.

A person or legal entity that owes someone something, usually expressed as a certain amount of money. A debtor is obliged to return the amount to the creditor within a defined timescale, usually with interest added. Once the debt is repaid, the obligation ceases to exist.

By way of enforcement proceedings, the creditor enforces the collection of financial claims with the assistance of the judicial system. The aim of enforcement proceedings is to obtain the claimed amount from the customer’s assets including, for example, future income which the creditor may be able to (partially) obtain by applying for a salary pledge. The creditor can only start enforcement proceedings once the creditor has obtained an enforceable title like a final court ruling.

Factoring generally refers to the sale of receivables arising from the sales of goods or services prior to their becoming due, i.e. directly after invoicing. The buyer is the factor.

The factor pays the customer in return for the sale. Any further duties the factor may assume on behalf of the company depend on the agreement.

The guarantor is treated like a co-customer, but not until the principal customer has failed to fulfil their payment obligations despite being requested and reminded as appropriate.

Occurs when a customer is unable to pay the amount(s) owed to one or more creditor(s).

An agreement between the creditor and the customer or between the customer and the debt collection agency to pay off an obligation in instalments over a period of time.

Non-performing loans are debts arising from a credit contract that have not been paid despite being due and payable.

Non-performing receivables are debts that have not been paid despite being due and payable. Non-performing receivables are often called non-performing loans (NPL) even if the underlying contract is not a loan agreement.

A term which may also be used instead of “debtor”. Obligor is often used in a wider sense to include, inter alia, guarantors.

See “instalment agreement”

See “attachment”.

A legally existing claim against a customer following the supply of goods or services. This often takes the form of unpaid invoices or outstanding credit repayments.

Receivables management refers to the function within a company which carries out all activities relating to receivables, e.g. dunning and credit management.

Factoring without assumption of liability for non-payment of debts (i.e., without credit protection) is called ‘recourse factoring’. Non-recourse factoring, also known as ‘full-service factoring’ means the factor takes on the risk of non-repayment and manages all procedures relating to collection of the debts.

If the customer requires full credit protection while taking charge of the receivables management themselves, the term ‘bulk’ or ‘in-house’ factoring is used.

(See also: factoring.)

See “assignment”.

See “assignment”