Difference between revisions of "Debt: Glossary of Terms"
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| − | + | == A == | |
| − | |||
| − | + | '''Adjudications''' - is an out-of-date term for bankruptcy. | |
| − | |||
| − | ''' | + | '''Administration Orders''' - An Administration Order may apply if you have at least one County Court Judgment against you and total debts do not exceed £5,000. It allows a County Court to administer payments to all your creditors. One payment is made to the court and the court splits this between all creditors according to how much you owe. As long as an Order is in force, creditors cannot take further enforcement action and interest is stopped. |
| − | + | '''Arrangement to pay'''- is an agreement between a lender and a customer to vary a customer's payment schedule | |
| + | |||
| + | '''Arrears''' - Arrears occur when you fail to meet the contractual payments to your household bills. Missing payments to your mortgage, rent or council tax etc can lead to serious arrears, which must be paid immediately. You can also be in arrears if you don't maintain your payments on unsecured debts. Arrears will accumulate if you continue to miss payments and you will be required to pay an additional amount on top of the regular payments until the arrears are cleared. | ||
| + | |||
| + | '''Assets''' - Assets are items you own that have monetary value. Assets would include your property, car, stocks, shares, antiques and savings etc. | ||
| + | |||
| + | '''Assignment''' - the sale or transfer of a contract or agreement by one company to another. | ||
| + | |||
| + | '''Assignment Notice''' - A notice to the debtor informing him/her that a debt has been assigned (sold) to another company. Required under s136 of the Law of Property Act 1925. | ||
'''Attachment of Earnings Order''' | '''Attachment of Earnings Order''' | ||
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* You are an employee (not self-employed or on benefits). | * You are an employee (not self-employed or on benefits). | ||
* You owe more than £50 on the judgment. | * You owe more than £50 on the judgment. | ||
| − | |||
| − | '''Bankruptcy Order''' | + | '''Attachment of Benefits''' - Similar to Attachment of Earnings, if you fail to make the repayments once a county court judgment has been issued the council may take deductions from your benefit. They are made at the rate of 5% of the personal allowance for a single claimant aged 25 and above. The attachments of benfits will continue until the debt is discharged. |
| + | |||
| + | |||
| + | == B == | ||
| + | '''Balliff's''' - Employed mainly by the Court to enter into your property and take goods to sell at auction to cover debt that you owe to a lender who has previously obtained a CCJ to which you have failed to comply with. | ||
| + | |||
| + | '''Balloon Payment''' - A lump sum payment on a hire purchase or conditional sale agreement once some monthly payments have been made. | ||
| + | |||
| + | '''Bank''' - an institution likened to an organisation that lends out umbrellas but insists on having them back as soon as it starts raining. | ||
| + | |||
| + | '''Bankruptcy''' - A legal procedure that writes off all debts (with a few exceptions). You or one of your creditors can petition for bankruptcy. The debt is usually discharged after two to three years. However, if there is any equity in a bankrupt's home or other assets, they will usually be sold to repay debts. | ||
| + | |||
| + | '''Bankruptcy Order''' - A way of dealing with debts that cannot be paid. Bankruptcy proceedings free an individual from overwhelming debts. The official receiver is responsible for the administration of bankruptcies. | ||
| + | |||
| + | '''Bankruptcy petition''' - A formal document, usually issued by the debtor himself/herself or by a creditor, which is submitted to the court in order to obtain a Bankruptcy order. | ||
| + | |||
| + | |||
| + | == C == | ||
| + | |||
| + | '''CAIS (Credit Account Information Sharing)''' - CAIS refers to the credit account information held by Experian. Lenders provide information on accounts held with their customers. In return, lenders can view the same level of information when they make a search of our records during an application for credit. For example, banks that provide only information on accounts with a history of arrears can view only defaulted and delinquent accounts. | ||
| + | |||
| + | '''CCA (Consumer Credit Association)''' - The CCA is a professional body representing the interests of small companies in the credit industry. | ||
| + | |||
| + | '''CCA 1974''' - Consumer Credit Act 1974 - the act of parliament which regulates credit in England and Wales. This Act is supplemented by various reulations (mainly published in 1983) and the CCA 2006. | ||
| + | |||
| + | '''CCA 2006''' - Consumer Credit Act 2006 - a major amendment to the CCA 1974. | ||
| + | Charging Order - an order of a court that a charge be placed on a property so that, when it is sold, the first part of the proceeds of the sale go to pay off an outstanding debt. A charging order effectively turns an unsecured loan into a secured loan. The existance of a charging order is noted on the deeds of the property in question. The Charging Orders Act 1979 allows creditors with a high court judgemnet or county court judgment the ability to secure the debt to assets. A charging order can't be made unless payments have been defaulted on a CCJ. | ||
| + | |||
| + | '''Charge for Payment''' - A document served in Scotland, where the debtor has been ordered to pay an outstanding debt within a given timescale. Similar to a County Court Judgement in England and Wales. | ||
| + | |||
| + | '''CRA''' - Credit Reference Agency - one of several companies who maintain records of debtors' history of payments, etc. | ||
| − | + | '''Credit''' - the loaning of money. | |
| − | |||
| − | ''' | ||
| − | + | '''Credit Agreement''' - an agreement (contract) between a creditor and debtor to loan money. | |
| − | ''' | + | '''Credit Card''' - a credit token as defined in the CCA 1974. |
| − | + | '''Creditor''' - someone lending money. A person or company whom lends you money (usually a bank, building society or credit card company). | |
| − | ''' | + | '''Credit Record''' - the record of a debtor held by Credit Reference Agencies. |
| − | + | '''Credit File''' - A file held by authorised companies with financial history regarding credit applications and credit you have obtained. | |
| − | A | ||
| − | ''' | + | '''County Court Judgment - CCJ''' - A judgement issued by the court in order for you to make payments to a debt you owe when you have failed to keep to an original agreement with the lender and not made any attempts to come to an agreement for repayment. |
| − | + | '''Contractual Payments''' - These are the payments you agreed to pay each month when you signed the credit agreement. Failing to make the contractual payments can lead to arrears and this can affect your credit rating. | |
| − | ''' | + | '''Company Voluntary Arrangement''' - This is the equivalent to an Individual Voluntary Arrangement, but for businesses. It allows any financial problems to be overcome with the creditor's consent so that the business can continue to trade. |
| − | A | + | '''Certificate of Satisfaction''' - A county court document confirming a judgment has been satisfied (paid in full) or set aside (removed from the public record because it was paid within one calendar month). A fee of £10 is required. |
| − | ''' | + | '''Citizens' Advice Bureau. - CAB''' - A voluntary service provided in most major towns which offers free advice to individuals on financial and other matters. |
| − | |||
| − | |||
| + | == D == | ||
| + | |||
'''Debt management programme''' | '''Debt management programme''' | ||
Revision as of 00:37, 27 September 2008
A
Adjudications - is an out-of-date term for bankruptcy.
Administration Orders - An Administration Order may apply if you have at least one County Court Judgment against you and total debts do not exceed £5,000. It allows a County Court to administer payments to all your creditors. One payment is made to the court and the court splits this between all creditors according to how much you owe. As long as an Order is in force, creditors cannot take further enforcement action and interest is stopped.
Arrangement to pay- is an agreement between a lender and a customer to vary a customer's payment schedule
Arrears - Arrears occur when you fail to meet the contractual payments to your household bills. Missing payments to your mortgage, rent or council tax etc can lead to serious arrears, which must be paid immediately. You can also be in arrears if you don't maintain your payments on unsecured debts. Arrears will accumulate if you continue to miss payments and you will be required to pay an additional amount on top of the regular payments until the arrears are cleared.
Assets - Assets are items you own that have monetary value. Assets would include your property, car, stocks, shares, antiques and savings etc.
Assignment - the sale or transfer of a contract or agreement by one company to another.
Assignment Notice - A notice to the debtor informing him/her that a debt has been assigned (sold) to another company. Required under s136 of the Law of Property Act 1925.
Attachment of Earnings Order
If a creditor has a judgment against you in the County Court which you do not pay then they can try to enforce the judgment against you. One of the ways this can be done is the creditor applies to the County Court for an Attachment of Earnings Order to be made. This order tells your employer to make deductions straight from your earnings in order to pay the debt. Your employer then sends the money to the court. Your employer can also deduct £1.00 every time they take money out of your wages towards the cost of administering the Attachment of Earnings Order.
The court can order deductions to be made directly from your earnings if:
- You are behind with payments on your County Court Judgment (CCJ).
- You are an employee (not self-employed or on benefits).
- You owe more than £50 on the judgment.
Attachment of Benefits - Similar to Attachment of Earnings, if you fail to make the repayments once a county court judgment has been issued the council may take deductions from your benefit. They are made at the rate of 5% of the personal allowance for a single claimant aged 25 and above. The attachments of benfits will continue until the debt is discharged.
B
Balliff's - Employed mainly by the Court to enter into your property and take goods to sell at auction to cover debt that you owe to a lender who has previously obtained a CCJ to which you have failed to comply with.
Balloon Payment - A lump sum payment on a hire purchase or conditional sale agreement once some monthly payments have been made.
Bank - an institution likened to an organisation that lends out umbrellas but insists on having them back as soon as it starts raining.
Bankruptcy - A legal procedure that writes off all debts (with a few exceptions). You or one of your creditors can petition for bankruptcy. The debt is usually discharged after two to three years. However, if there is any equity in a bankrupt's home or other assets, they will usually be sold to repay debts.
Bankruptcy Order - A way of dealing with debts that cannot be paid. Bankruptcy proceedings free an individual from overwhelming debts. The official receiver is responsible for the administration of bankruptcies.
Bankruptcy petition - A formal document, usually issued by the debtor himself/herself or by a creditor, which is submitted to the court in order to obtain a Bankruptcy order.
C
CAIS (Credit Account Information Sharing) - CAIS refers to the credit account information held by Experian. Lenders provide information on accounts held with their customers. In return, lenders can view the same level of information when they make a search of our records during an application for credit. For example, banks that provide only information on accounts with a history of arrears can view only defaulted and delinquent accounts.
CCA (Consumer Credit Association) - The CCA is a professional body representing the interests of small companies in the credit industry.
CCA 1974 - Consumer Credit Act 1974 - the act of parliament which regulates credit in England and Wales. This Act is supplemented by various reulations (mainly published in 1983) and the CCA 2006.
CCA 2006 - Consumer Credit Act 2006 - a major amendment to the CCA 1974. Charging Order - an order of a court that a charge be placed on a property so that, when it is sold, the first part of the proceeds of the sale go to pay off an outstanding debt. A charging order effectively turns an unsecured loan into a secured loan. The existance of a charging order is noted on the deeds of the property in question. The Charging Orders Act 1979 allows creditors with a high court judgemnet or county court judgment the ability to secure the debt to assets. A charging order can't be made unless payments have been defaulted on a CCJ.
Charge for Payment - A document served in Scotland, where the debtor has been ordered to pay an outstanding debt within a given timescale. Similar to a County Court Judgement in England and Wales.
CRA - Credit Reference Agency - one of several companies who maintain records of debtors' history of payments, etc.
Credit - the loaning of money.
Credit Agreement - an agreement (contract) between a creditor and debtor to loan money.
Credit Card - a credit token as defined in the CCA 1974.
Creditor - someone lending money. A person or company whom lends you money (usually a bank, building society or credit card company).
Credit Record - the record of a debtor held by Credit Reference Agencies.
Credit File - A file held by authorised companies with financial history regarding credit applications and credit you have obtained.
County Court Judgment - CCJ - A judgement issued by the court in order for you to make payments to a debt you owe when you have failed to keep to an original agreement with the lender and not made any attempts to come to an agreement for repayment.
Contractual Payments - These are the payments you agreed to pay each month when you signed the credit agreement. Failing to make the contractual payments can lead to arrears and this can affect your credit rating.
Company Voluntary Arrangement - This is the equivalent to an Individual Voluntary Arrangement, but for businesses. It allows any financial problems to be overcome with the creditor's consent so that the business can continue to trade.
Certificate of Satisfaction - A county court document confirming a judgment has been satisfied (paid in full) or set aside (removed from the public record because it was paid within one calendar month). A fee of £10 is required.
Citizens' Advice Bureau. - CAB - A voluntary service provided in most major towns which offers free advice to individuals on financial and other matters.
D
Debt management programme
The lender has reported that an account has been included in a debt management programme, for example one organised by a Citizens Advice Bureau or the Consumer Credit Counselling Service.
Debtor
An individual or company that owes debt to another individual or company (the creditor) i.e. YOU !!!
Defaulted account
This is an account for which you have not kept to a credit agreement and the relationship between you and the lender has broken down. The lender has terminated the credit agreement. A record of these accounts is kept for six years from the default date.
Default notice
A default notice is a formal letter a lender sends you when you are so far behind in your payments that they have decided your relationship with them has broken down. This varies from lender to lender but generally happens when you are between three and six months in arrears. If you receive a default notice it might mean that the lender is planning to take legal action to recover the money, but you must be notified separately of this. A default notice will almost certainly mean that the account will be shown as defaulted on your credit report, which will make it difficult for you to get credit. This information is kept on your report for six years but the balance should be updated as you make repayments and after six years it is removed, whether or not you're fully paid up.
Electoral roll
The electoral roll is a list of the names of all people registered at an address who are entitled to vote. Lenders use this information to check the identity of those applying for credit.
IVA (Individual Voluntary Arrangement)
Voluntary Arrangements are an alternative to Bankruptcy. If an individual has accrued a number of debts, they can enter into a Voluntary Arrangement, which is administered by the County Court or a Licenced Insolvency Practioner. It means that a repayment plan has been agreed with creditors.
Information Commissioner's Office The Information Commissioner's Office regulates the work of credit reference agencies and lenders. If an individual believes that a lender or a credit reference agency has not fulfilled their legal obligations they may request that the Information Commissioner investigates the matter on their behalf.
Liability Order
A liability order enables a Council to do one of three things:
- Instruct bailifs to recover enough property from your home to cover the debt
- Deduct the amount you owe directly from your earnings
- Declare you bankrupt
Official receiver
An official receiver is responsible for the administration of a Bankruptcy.
Order of Discharge
The terms of a Bankruptcy have been met.
Repossession
Members of the Council of Mortgage Lenders record information on customers who have given up their homes or had them repossessed.
Statutory Demand
A statutory demand requires that the debtor either:
- Pays the relevant amount
- Offers to secure it against property
- Offers to repay the debt in a way that is satisfactory to the creditor. For example, by instalments.
Some creditors use statutory demands as a way of persuading debtors to pay off the debt, usually by borrowing elsewhere.
However, statutory demands should be taken seriously. After 21 days the creditor can petition for a bankruptcy order. Therefore, it is usually worth contacting the creditor by telephone and asking them what their next step will be.
Ignoring a statutory demand may encourage the creditor to petition for bankruptcy. It is worth bearing this in mind, particularly if the debtor is contemplating petitioning for his own bankruptcy.
If the debtor wants to avoid bankruptcy he should consider:
- Making payment(s) to reduce the debt to less than £750; or
- Making an offer to pay by instalments; or
- Making an offer of a reduced amount in settlement of the debt; or
- Applying to have the statutory demand set aside
Time Order
A Court has the power to reduce the monthly payments and interest on your loan. However, the Court may only agree to do this if the debtor is in temporary financial difficulty and intends on returning to the original repayment terms once this difficulty is relieved
