Debt relief glossary

Plain-English definitions of the terms that come up most often in debt relief, bankruptcy, settlements, and disability claims — each linked to the calculator that does the math.

• Chapter 7 bankruptcy — A federal liquidation bankruptcy that discharges most unsecured debt in 3–6 months.
• Means test — The two-part income and expense formula that determines whether you qualify for Chapter 7.
• Debt settlement — Negotiating with a creditor to accept less than the full balance owed as payment in full.
• SSDI (Social Security Disability Insurance) — Federal disability benefit for workers who have paid into Social Security and can no longer work.
• Statute of limitations on debt — The deadline after which a creditor can no longer sue to collect a debt — but the debt may still exist.
• Debt-to-income ratio (DTI) — Your total monthly debt payments divided by your gross monthly income — used by lenders to assess affordability.
• Structured settlement — A personal injury or workers' comp settlement paid as a series of future tax-free payments instead of a lump sum.
• Workers' compensation — State-mandated no-fault insurance that pays medical costs and lost wages when you are injured at work.
• SR-22 — A certificate filed by your insurer proving you carry minimum liability coverage — required after certain violations including DUI.
• Alimony — Court-ordered spousal support payments from the higher-earning spouse to the lower-earning spouse after divorce.