Start My Answer

Certificate of Debt: A Definition

Sarah Edwards | November 01, 2022

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Edwards is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Certificates of debt are like ^^

Summary: The purpose of a certificate of debt is to show the current amount that a person owes. Lenders, banks, businesses, and governments can use certificates of debt to ensure that they get their money back. If you’re struggling with debt, SoloSuit can help you respond to collectors and beat them in court.

A certificate of debt has several definitions, depending on the context of its use. Consumers, companies, and governments use certificates of debt for different purposes. Typically, the primary purpose of a certificate of debt is to show the current amount that the entity or individual owes another person or entity.

How does a certificate of debt affect consumers?

Individuals who own or purchase properties, like homes, land, or commercial buildings, will most likely encounter a certificate of debt. The certificate of debt provides a simple statement of the current value of the mortgage on the property.

Someone selling a home may ask their bank for a copy of their certificate of debt. Typically, the certificate of debt will list information such as:

  • The address of the property
  • The original amount of the mortgage
  • The current outstanding balance on the mortgage
  • The name of the property owner and identifying information

Some debt certificates will also provide an amortization schedule, which identifies how much of each payment goes to the principal and how much goes to interest. If there are any penalties associated with early repayment, the document will list those.

A certificate of debt helps the seller determine the fair price for selling their home. If the amount is too low, it won’t cover the cost of their outstanding mortgage with the bank, and they’ll need to settle the remaining amount out of pocket before the sale can proceed.

If the sales price of a home covers more than the mortgage amount, the seller will keep the additional amount as profit. They can use the profit as a down payment on a new home or to cover other obligations.

Sometimes, a consumer may request a certificate of debt from unsecured lenders like a credit card company. The information in the document will include the current loan balance and possibly the consumer’s payment history. A certificate of debt is helpful for individuals seeking to pay off their debts through debt consolidation or debt settlement.

Lenders can also provide certificates of debt for property such as a vehicle. You might want a certificate of debt for a car if you plan to trade it in or sell it. The document will tell you exactly what you owe, so you can determine whether you’ll still owe a balance after the trade or have money to put down on a different vehicle.

What does a business use a certificate of debt for?

Businesses have two primary ways of obtaining funding: raising equity or issuing debt. Raising equity brings in money in exchange for partial ownership in the organization.

Public companies can issue stock through an exchange, like Nasdaq or the NYSE. Private companies can grant equity to interested investors, who often come in as business partners or limited partners through a private equity fund.

Organizations that issue debt find willing lenders who can offer money in exchange for regular payments, similar to a loan. A lender of business debt usually has no part in business decisions. Instead, they simply receive regular payments from the organization, including interest.

A lender who provides financing to an organization through debt will give the organization a certificate of debt. Essentially, the certificate stipulates that the lender has rights to the debt and will state the total balance borrowed by the organization.

Organizations that don’t have access to debt through traditional means, like commercial lenders or banks, typically benefit from private loans.

How do governments use certificates of debt?

Governments use certificates of debt to raise funding for financing the needs of the country. The certificate of debt is known as a bond, and it’s a strategic way of obtaining money without raising taxes or turning to international lenders like the International Monetary Fund.

Both individuals and entities can purchase government bonds. Investors purchase the rights to a regular investment stream when they buy a bond. Bonds typically feature regular interest payments, and the investor receives the initial amount invested upon maturity.

Some bonds feature regular interest payments, typically made quarterly or yearly. However, some investors choose to receive the entire amount of the bond, including its interest, once the bond matures.

Governments may issue bonds for long periods, typically ten years or more. Bonds are attractive to investors seeking certainty in their investments. Unlike stocks, a bond retains its value despite micro or macro shocks to the economy. If the bond is for less than ten years, investors refer to it as a note.

Respond to a debt collector when they first contact you

If you’re struggling to manage your debt, you might have debt collectors calling and messaging you non-stop in the hopes of getting you to pay off your debt. There is a good chance that you don’t even recognize the debts they claim you owe.

You might not even owe any debt at all—they could be reaching out to the wrong person, have out of date debt records, or you might be a victim of identity theft.

Regardless, when you receive initial contact from a debt collector, sending a Debt Validation Letter can get them off your back. Requesting an official debt validation forces the collectors to prove, with written documentation and evidence, that the debt they are trying to collect is valid.

A debt is valid if the exact amount is correct and there is proof that the person being contacted about the debt actually owes it. If the debt collector purchased the debt, they must also prove that they have proper stewardship over it and the rights to collect on it.

Learn more about how a Debt Validation Letter can help you in this video:

Beat debt collectors in court

If you’ve been sued for a debt, the first step to winning your case is to respond with a written Answer. You must file your Answer into the case before your state’s deadline, which could be anywhere from 14-35 days.

In your Answer, you should respond to each claim made against you and assert your affirmative defenses. You can draft and file your Answer in all 50 states with SoloSuit—all in just 15 minutes!

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

Get Started

We have answers.
Join our community of over 40,000 people.

You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now or are just looking for support, we're here for you.

Ask a Question

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

How to answer a summons for debt collection in your state

Here's a list of guides for other states.

All 50 states.

Guides on how to beat every debt collector

Being sued by a different debt collector? Were making guides on how to beat each one.

Win against credit card companies

Is your credit card company suing you? Learn how you can beat each one.

Going to Court for Credit Card Debt — Key Tips

How to Negotiate Credit Card Debts

How to Settle a Credit Card Debt Lawsuit — Ultimate Guide

Get answers to these FAQs

Need more info on statutes of limitations? Read our 50-state guide.

Why do debt collectors block their phone numbers?

How long do debt collectors take to respond to debt validation letters?

What are the biggest debt collector companies in the US?

Is Zombie Debt Still a Problem in 2019?

SoloSuit FAQ

If a car is repossessed, do I still owe the debt?

Is Portfolio Recovery Associates Legit?

Is There a Judgment Against Me Without my Knowledge?

Should I File Bankruptcy Before or After a Judgment?

What is a default judgment?— What do I do?

Summoned to Court for Medical Bills — What Do I Do?

What Happens If Someone Sues You and You Have No Money?

What Happens If You Never Answer Debt Collectors?

What Happens When a Debt Is Sold to a Collection Agency

What is a Stipulated Judgment?

What is the Deadline for a Defendants Answer to Avoid a Default Judgment?

Can a Judgement Creditor Take my Car?

Can I Settle a Debt After Being Served?

Can I Stop Wage Garnishment?

Can You Appeal a Default Judgement?

Do I Need a Debt Collection Defense Attorney?

Do I Need a Payday Loans Lawyer?

Do student loans go away after 7 years? — Student Loan Debt Guide

Am I Responsible for My Spouses Medical Debt?

Should I Marry Someone With Debt?

Can a Debt Collector Leave a Voicemail?

How Does Debt Assignment Work?

What Happens If a Defendant Does Not Pay a Judgment?

How Does Debt Assignment Work?

Can You Serve Someone with a Collections Lawsuit at Their Work?

What Is a Warrant in Debt?

How Many Times Can a Judgment be Renewed in Oklahoma?

Can an Eviction Be Reversed?

Does Debt Consolidation Have Risks?

What Happens If You Avoid Getting Served Court Papers?

Does Student Debt Die With You?

Can Debt Collectors Call You at Work in Texas?

How Much Do You Have to Be in Debt to File for Chapter 7?

What Is the Statute of Limitations on Debt in Washington?

How Long Does a Judgment Last?

Can Private Disability Payments Be Garnished?

Can Debt Collectors Call From Local Numbers?

Does the Fair Credit Reporting Act Work in Florida?

The Truth: Should You Never Pay a Debt Collection Agency?

Should You Communicate with a Debt Collector in Writing or by Telephone?

Do I Need a Debt Negotiator?

What Happens After a Motion for Default Is Filed?

Can a Process Server Leave a Summons Taped to My Door?

Learn More With These Additional Resources:

Need help managing your finances? Check out these resources.

How to Make a Debt Validation Letter - The Ultimate Guide

How to Make a Motion to Compel Arbitration Without an Attorney

How to Stop Wage Garnishment — Everything You Need to Know

How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)

Defending Yourself in Court Against a Debt Collector

Tips on you can to file an FDCPA lawsuit against a debt collection agency

Advice on how to answer a summons for debt collection.

Effective strategies for how to get back on track after a debt lawsuit

New Hampshire Statute of Limitations on Debt

Sample Cease and Desist Letter Against Debt Collectors

The Ultimate Guide to Responding to a Debt Collection Lawsuit in Utah

West Virginia Statute of Limitations on Debt

What debt collectors cannot do — FDCPA explained

Defending Yourself in Court Against Debt Collector

How to Liquidate Debt

Arkansas Statute of Limitations on Debt

Youre Drowning in Debt — Heres How to Swim

Help! Im Being Sued by My Debt Collector

How to Make a Motion to Vacate Judgment

How to Answer Summons for Debt Collection in Vermont

North Dakota Statute of Limitations on Debt

ClearPoint Debt Management Review

Indiana Statute of Limitations on Debt

Oregon Eviction Laws - What They Say

CuraDebt Debt Settlement Review

How to Write a Re-Aging Debt Letter

How to Appear in Court by Phone

How to Use the Doctrine of Unclean Hands

Debt Consolidation in Eugene, Oregon

Summoned to Court for Medical Bills? What to Do Next

How to Make a Debt Settlement Agreement

Received a 3-Day Eviction Notice? Heres What to Do

How to Answer a Lawsuit for Debt Collection

Tips for Leaving the Country With Unpaid Credit Card Debt

Kansas Statute of Limitations on Debt Collection

How to File in Small Claims Court in Iowa

How to File a Civil Answer in Kings County Supreme Court

Roseland Associates Debt Consolidation Review

How to Stop a Garnishment

Debt Eraser Review

Do Debt Collectors Ever Give Up?

Can They Garnish Your Wages for Credit Card Debt?

How Often Do Credit Card Companies Sue for Non-Payment?

How Long Does a Judgement Last?

​​How Long Before a Creditor Can Garnish Wages?

How to Beat a Bill Collector in Court