A

Accounts Payable

Amounts owed by a debtor to a creditor, for any goods or services obtained.

Arrears

To get into Arrears is when an individual has fallen behind on their minimum monthly payments.

Assets

Assets are items of value which can be converted into cash to pay back some of your debts, such as your home or your car. 

B

Bankruptcy Order

This is a Court Order which states the individual is legally insolvent as they are not capable of paying back their outstanding debts.

Bankruptcy Restrictions Order (BRO)

The Bankruptcy Restrictions Order (BRO) was introduced to those bankrupts who have been dishonest in some way. It means that the restrictions of bankruptcy can continue to apply after the bankrupt has been discharged. These could last for as long as 15 years.

C

CCJ - County Court Judgement

When a court judgement is ruled against an individual, stating that they have to pay back any debts owed to a lender.

Creditors

Creditors are a company or  person to whom you owe money to.

Creditors Meeting

A Creditors Meeting happens as part of the IVA proposal. The creditors will vote in person or by proxy on whether to accept or reject your IVA proposal. If more than 75% of creditors, in terms of debt value, agree to your IVA, then it is automatically accepted.

CVA - Company Voluntary Arrangement

A Company Voluntary Arrangement is the business equivalent for IVAs (Individual Voluntary Arrangement). It is so the business can still trade, with the creditors consent, despite of any financial problems.  

D

Debt

Debt is money owed back to a company or a person, from where it was borrowed.

Debt Consolidation

This means that you consolidate your existing unsecured debt into one lower monthly payment.

Debt Management Plan

A Debt Management Plan is a repayment scheme which helps an individual manage their debts. For more information to see if this is a suitable debt solution for you, please call our advisors on 0800 048 1768.

Default Notice

A Default Notice is issued by your creditors when you have failed to keep to a financial agreement by missing payments. It states that they are intending to take the appropriate steps to recover the money that is owed to them.  

Disposable Income

The income that is remaining after all essential expenses (such as a mortgage payment) have been made.

E

Earned Income

The amount of income which comes from any employment or pension, as opposed to any unearned such as bank interest.

F

Final discharge

This is when you have been discharged from bankruptcy. It means that you are now free from debt and your bankruptcy term. 

G

Gross Income

The amount of income before any deductions, such as tax or national insurance.

H

H.P - Hire Purchase

This is most commonly associated with car finance. It is pre-agreed that the asset will only remain property of the consumer when all payments have been made on time, and full payment has been reached.

I

I.P - Insolvency Practitioner

An Insolvency Practitioner (IP), otherwise known as a Trustee, is a legally recognised financial expert. They are qualified to deal with any Insolvency procedures, such as an IVAs.

Insolvency Act 1986

The 1986 Insolvency Act is the legislation that governs insolvency law and practice.

Insolvent

You become insolvent when you are no longer able to settle your debts as they fall due.However, this is a misunderstood term - being insolvent does not mean that you are bankrupt. It simply means that you cannot afford to repay your debts as they fall due. If you find yourself insolvent, there are solutions out there for you which does not mean Bankruptcy.Please see our pages on IVAs and Debt Management Plans, or call our expert insolvency advisors on 0800 048 1768. 

IVA - Individual Voluntary Arrangement

IVAs (Individual Voluntary Arrangements) are when an individual comes to an legally binding agreement with their creditors, about repaying a fixed amount of debt, typically over 60 months. Any debt after this period is written off. See our IVAs page for more information.

IVA Nominee

This is usually an Insolvency Practitioner (I.P). The IVA Nominee will be given permission to act on behalf of the debtor through the lifetime of the IVA, from proposal to completion.

J

Judgement

A Judgement is the recognition of a debt by the court.

L

Liquid Assets

An asset which can readily be converted into cash.   

Liquidation

Liquidation can apply to companies or partnerships. It involves the distribution of the assets and usually the closing down of the debtor's business.

N

Nominee

A Nominee is the person chosen to report on behalf of a debtors IVA proposal.

P

Priority Debts

A Priority Debt is a debt which must be paid or you will risk losing the asset/service. This includes secured loans, mortgages and council tax.

Protected Trust Deed (PTD)

A Protected Trust Deed is the Scottish equivalent of an IVA. There are some differences which are unique to a PTD. A PTD normally lasts for 3 years. Click here for more information about Trust Deeds.

Proxy

This is the authorisation given by a creditor for another person to attend a meeting on their behalf. This is common at an IVA Meeting of Creditors, where creditors will often vote on the proposals by proxy.

R

Repossession

When a creditor can take your personal possessions to fund it a debt that you owe and has not been paid on time.

S

Secured Debt

This is money that is borrwed against an asset, such as your home or car. If payments are unable to be made, then the asset can be demanded as a form of payment.

T

Trustee

In Bankruptcy, the Trustee takes control of all the assets of the bankrupt. They will override the selling of assets so tat some form of repayment can be made to the creditors. The same is true with an IVA, the Trustee is an authorised Insolvency Practitioner who will deal with the estate and oversee the IVA.

U

Undischarged Bankrupt

This is an individual who is still in the term of their Bankruptcy Order and has not yet been discharged. 

Unsecured Debt

Debt which is not secured against any asset, such as a house or car.

Unsecured Loan

An Unsecured or a Personal Loan is given for your personal use, and is not secured against any of our assets.

Utilities

These are regarded as essential services, such as gas or electricity.

V

Value

The value is the worth of an asset expressed as an amount of money.