Debt Help and Advice Jargon Buster.

Our A to Z Jargon Buster will help you understand the debt jargon and explains the debt terminology clearly.

A

Annulment
Assets

B

Bankruptcy Restictions Order or Undertaking
Bankruptcy Petition
Blacklisted

C

Charging Order
Consolidation
Creditor
Creditors Meeting

D

Debts
Default
Discharged
Disposable Income

E

Estate

F

Full and Final Settlements

H

H.P (Hire Purchase)

I

Individual Voluntary Arrangement (I.V.A.)
Informal Arrangement (Debt Management Plan)
Insolvency

L

Legal Charge

M

Mortgage

P

Petition
Proposal
Preferential Creditor
Priority Bills
Proxy

S

Second Charge/ Secured Loan

R

Re-mortgage

U

Unsecured Creditor

Annulment

Cancellation

Assets

Anything that belongs to you that can be used to pay your debts.

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Bankruptcy Restictions Order or Undertaking

A Court Order or an undertaking which means that the restrictions of Bankruptcy will continue for a given period (2-15 years).

Bankruptcy Petition

A request by you to the Court for you to made bankrupt.

Blacklisted

There is not a blacklist held anywhere, only factual information may be held about you in order to assist lenders making decisions in relation to your application

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Charging Order

An order made by the Court placing a legal charge on your home.

Consolidation

Obtaining further finance to clear exsisting debts. For example taking one larger loan to repay several smaller creditors. Care should be taken to avoid further costly loans, that increase the overall debt further.

Creditor

Someone to whom you owe money.

Creditors Meeting

A meeting at which your creditors are able to attend in person or in proxy to vote on any arrangements that has been offered to them. Usually used in I.V.A.‘s whereby most votes will be in proxy.

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Debts

Money that you owe, even if you have made the minimum payments

Default

A Default notice; is issued by lenders in relation to any credit agreement with you, when you have not made the expected payments. (Consumer Credit Act). This explains the lenders rights in default.

Discharged

Freed from an arrangement.

Disposable Income

Having considered your household income and your household expenses (excluding payments to your debts), the difference between the two figures is calculated as your disposable income. It is this amount that is used as the basis for any offer to your creditors.

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Estate

Your assets or property that can be used to pay your debts

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Full and Final Settlements

In many cases clients are able to release equity from their property or use a lump sum that has been a gift from a third party. This can be used to offer a reduced settlement of the debt to the creditors. This can often occur when the clients have no disposable income due to a change in circumstances. In many cases significant reductions in the amount due can be achieved.

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H.P (Hire Purchase)

A Finance agreement relating to goods supplied. Payments are usually made monthly, at a fixed rate over a fixed term

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Individual Voluntary Arrangement (I.V.A.)

A (usually) five year formal arrangement with your creditors. A monthly payment is made during the term and the debt is discharged at the end of the term. All interest and charges are prevented from accruing and an affordable monthly payment is made into the arrangement. It is a private and legally binding arrangement, offering a realistic option for those with larger debts. Suitable for: Tenants, homeowners, couples, sole applicants and those who are employed or self-employed.

Informal Arrangement (Debt Management Plan)

Re-scheduling the payments over a longer period of time. In some cases interest and charges may be suspended. Does not offer legal protection. Used for smaller debts/fewer creditors.

Insolvency

The inability to repay debts/borrowings. Debts and borrowings are greater than any assets held

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Legal Charge

A form of security to ensure payment of a debt (mortgage, secured loan etc.).

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Mortgage

A legal charge held over assets, usually property by a lender (Bank, Building Society etc.).

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Petition

Bankruptcy petition.

Proposal

The proposed offer to your creditors when considering an arrangement.

Preferential Creditor

A creditor within an arrangement who is entitled to receive payments in priority to other unsecured creditors.

Priority Bills

Household essentials. Rent, mortgage, gas, water etc. These must be maintained regardless of the arrangement that is entered into.

Proxy

A creditor may decide to vote by fax or send someone to vote on there behalf at any meeting of the creditors

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Re-mortgage

The process of changing mortgage lender in order to release equity or secure a more favorable rate or terms

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Second Charge/ Secured Loan

A secured loan held on a property or other asset that is used to secure further finance/borrowing. Often used to release equity from a property. Usually used for consolidation of existing debts. Often more expensive than other forms of borrowings.

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Unsecured Creditor

Any creditor who does not hold a charge (for example a mortgage) as security for the debt.