Debt Dictionary: Your Guide to Financial Jargon

Moneymagpie Team 11th Mar 2024 No Comments

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It can be super confusing knowing where you are with debt terminology – being in debt can be stressful enough without having to look up loads of terms to understand their meaning.

So we’ve teamed up with Debt Advice firm, MoneyPlus, to compile an A-Z of debt terminology to help you find your footing.

 

A

Admin Orders: These kick in when you’ve got a County Court Judgment (CCJ) hovering over you and your total debt is under £5,000. Admin Orders let the County Court play middle man, divvying up your payments among all your creditors. While this order is in place, creditors can’t come knocking, and interest takes a breather.

Arrears: Think of arrears as the red flags waving when you miss payments on your mortgage, rent, or council tax. It’s like falling behind on a game of financial catch-up. Plus, your unpaid debts may earn you some arrears street cred with creditors.

Assets: If it’s got value, it’s an asset. We’re talking your property, car, stocks, shares, and even that vintage lamp Uncle Frank left you. These are your money-makers if you need to sell up to settle debts.

Assignment: Think of it as a handoff. One company’s selling or transferring your contract or agreement to another. Your debt’s changing hands, but your responsibility isn’t.

Attachment of Earnings: Ever heard of payday pain? That’s what happens when a court steps in to siphon off a chunk of your paycheck to repay debts. Missed a payment according to a County Court Judgment (CCJ)? Get ready for a little involuntary wage trimming.

Attachment of Benefits: When the council’s got your number, they might dip into your benefits to cover a debt you’ve been dodging. It’s like paying your dues with a small slice of your benefits pie until the debt’s a distant memory.

 

B

Bailiffs: These are the financial repo squad, swooping in to grab goods from your home and auction them off if you’ve got an unpaid CCJ. Consider them the final warning before your stuff hits the auction block. Find out what to do if the bailiffs are at your door.

Balloon Payment: It’s like the big finale in a firework show. You’ve been making your monthly payments, and now it’s time for one big bang – a lump-sum payment to wrap up that hire purchase or conditional sale agreement.

Bank: They’re the money masters, doling out loans like candy on Halloween. But remember, they want their umbrellas back when the financial storm hits.

Bankruptcy: Sometimes debts pile up faster than you can say “credit crunch.” That’s when bankruptcy steps in, wiping the slate clean on most debts. It’s like a financial do-over, but with some strings attached – like potentially selling off assets to square up with creditors. Find out how to go bankrupt.

Bankruptcy Order: When the court waves the bankruptcy wand and makes it official.

Bankruptcy Petition: It’s the legal paperwork that kicks off the bankruptcy process. Think of it as the first domino in your debt-releasing journey.

 

C

CCA 1974: The Consumer Credit Act 1974 – the law that keeps credit in check in England and Wales. It’s like the rulebook for lenders, with a few updates sprinkled in over the years.

CCA 2006: An upgrade to the Consumer Credit Act 1974, giving it a shiny new coat of financial regulation paint.

Charging Order: When a court slaps a lien on your property, making sure that when it sells, the first chunk of cash goes to pay off your debts. It’s like a debt makeover, turning an unsecured loan into a secured one.

Charge for Payment: In Scotland, this is the legal nudge telling you to pay up on an outstanding debt. It’s like a financial wake-up call, but with a legal twist.

Credit: It’s like financial goodwill – someone’s willing to loan you money based on trust and a little thing called interest.

Credit Agreement: When you and a lender shake hands (figuratively speaking) and agree on the terms of your loan. It’s like a financial contract, sealing the deal on your borrowing.

Credit Card: The plastic powerhouse of the financial world, regulated under the CCA 1974. Swipe wisely!

Creditor: The money maestro who’s got a stake in your financial game. They’re the ones lending you cash, with a little interest on the side.

CRA: The financial watchdogs keeping tabs on your credit history and payment track record.

Credit Record: Your financial report card, courtesy of Credit Reference Agencies. Find out how to clean up your credit record here.

Credit File: It’s like your financial diary, chronicling every credit move you make.

County Court Judgment (CCJ): A legal slap on the wrist for unpaid debts, courtesy of the court.

Contractual Payments: The financial promises you’ve made to keep up with your loan payments. Miss these, and you’re in hot water.

Company Voluntary Arrangement: Think of it as a financial peace treaty for businesses. With the creditors’ blessing, your business can get back on track.

Certificate Of Satisfaction: The golden ticket proving you’ve settled your CCJ or Attachment of Earnings. Just pay the £10 admission fee.

 

D

Data Controller: The gatekeeper of your personal data, keeping it safe and sound under the Data Protection Act 1998.

Debit Card: Your financial wingman for daily spending, with a direct line to your bank account. No credit, no problem.

Debt: The financial monkey on your back, courtesy of borrowed cash.

DCA: Debt Collection Agency, the heavy hitters tasked with chasing down your unpaid debts.

Debtor: That’s you – the one who owes the dough.

Default: The financial red flag waving when you miss a payment.

Default Notice: It’s the financial warning shot across the bow before a creditor takes action.

DMP: Debt Management Plan, your roadmap to paying off debts in bite-sized chunks.

 

 

E

Earnings Arrestment: It’s like an ATM for your paycheck, with the court skimming off a slice to pay your debts.

Equity: Your property’s financial superhero, swooping in to save the day when you’re in debt. Basically, it’s how much of your house you own.

Ex Parte: Legal proceedings flying solo, without the other party in the loop.

 

F

Final Discharge: The financial finish line, signaling the end of your bankruptcy journey.

Fraud: The financial fib that can land you in hot water, all for the sake of financial gain.

 

G

Guarantor: The financial hero who’s got your back, promising to pay up if you can’t.

Guarantee: The financial safety net that kicks in when your guarantor steps up to the plate.

 

H

Harassment: Crossing the financial line, defined by the Protection from Harassment Act 1997.

Hire-purchase: Your ticket to owning that shiny new gadget, with a little help from a financing plan.

Hire-purchase agreement: Your financial roadmap to owning that must-have item, regulated by the Consumer Credit Act 1974.

 

I

Income Payments Order: When the court comes knocking for a slice of your paycheck to pay off debts.

Informal Arrangement: Your financial handshake deal to repay creditors without a third-party mediator.

Insolvency: The financial reality check when you’re drowning in debts.

Insolvency Practitioner: Your financial lifeline when you’re in over your head in debt.

Interest: The financial fee for borrowing cash, paid in percentages.

IVA (Individual Voluntary Arrangement): Your five-year financial lifeline, offering a structured plan to pay off debts and start fresh.

 

J

Joint and Several Liability: When you’re on the financial hook for a loan with someone else, and they drop the ball, you’re picking up the tab.

 

L

Lender: The financial fairy godmother doling out loans when you’re in need.

Levy: When the bailiffs come knocking to collect what’s owed, with notice of their arrival seven days in advance.

Liabilities Orders: Your financial wake-up call for unpaid council tax, giving authorities the green light to deduct arrears from your wages or benefits.

Liquidation (Winding Up): When it’s game over for your business, and creditors are lining up to cash in their chips.

Letter Before Action or Letter of Claim: The financial head’s up before legal action comes knocking.

 

M

MoneyPlus: Your financial solution to help to make life less complicated – and less expensive. From financial services that can help you to overcome your troubles with debt once and for all, to jargon-free legal support so you always have someone on your side. moneyplusgroup.com

 

N

Notice of Assignment: When your debt changes hands, you’ll get the memo.

 

O

Official Receiver: The financial referee overseeing your bankruptcy proceedings.

OC: The Original Creditor.

 

P

Pro-Rata: Divvying up payments among creditors, so everyone gets a fair slice of the pie.

Property Restriction: When a creditor puts the brakes on selling your property during an IVA.

Proof Of Debt Form: Your financial receipt for staking a claim in an IVA or bankruptcy.

Proxy: When creditors can’t make the meeting, they send a financial stand-in to cast their vote.

 

R

Right To Offset: When your bank uses its financial trump card to cover missed payments on your loan or credit card.

 

S

Secured Debt: When your loan’s got backup, with your property or car on the line.

Secured Loan: Your financial safety net, backed by your property or car.

Statutory Demand: The financial ultimatum giving you 21 days to pay up or face the consequences.

Subject Access Request: Your financial backstage pass, giving you access to your personal data under the Data Protection Act 1998.

Surplus Income: Your financial leftovers after paying the bills, up for grabs by creditors.

 

T

TCC – Total Cost of Credit: Your financial bottom line, including fees and interest tacked onto your loan.

Time Orders: Your financial Hail Mary when creditors won’t budge on interest rates or payments.

Token Payments: When every penny counts, even if it’s just a token gesture toward your debts.

Transactions at an Undervalue: When your financial past comes back to haunt you, scrutinized up to 10 years back for sneaky asset transfers.

Trustee: Your financial watchdog, overseeing the sale of assets during an IVA or bankruptcy.

 

U

Unsecured Loan/Debt: When your loan’s flying solo, with no collateral to back it up.

 

V

Variation Order: When life throws you a financial curveball, and you need to shake up your payment plan.

 

W

Warrant of Execution: When the bailiffs come knocking to collect what’s owed, no ifs, ands, or buts.

Windfalls: Your financial silver lining, paying off debts with unexpected assets.

 

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.