Glossary - Debt Management

Bad Credit
Bad credit could be any loan or credit facility that has been unpaid for a period determined by the lender. It is also called Poor Credit.

Arrears
If you miss a payment, make a late payment or fail to pay the full sum owed on a loan or credit agreement you will fall into arrears, which could lead to a CCJ.

Black Listed
People who have a poor credit history may be susceptible to notes against their accounts that will indicate the big risk they pose to financial institutions. Should they receive credit, it will only be on a high interest rate.

Debt
Debt is the amount of money you owe to lenders.

Debt Consolidation
This could be a single loan that that you use to pay off the majority of your outstanding unsecured debts. you would usually pay a lower monthly amount over a longer period.

Debt Management Plan
A type of repayment scheme, this plan helps individuals to manage their debts. please contact one of our advisors to see how this could help you.

Debtor
A debtor is the person who owes money to a financial institution or company.

Default
Being in payment arrears means you are more than 30 days behind the repayment date and it could lead to further legal action.

Default Notice
Creditors issue default notices to debtors to inform them that the company will start with legal proceedings to recover their money.

Early Repayment Charge
Early repayment charges, also sometimes known as a settlement charge, are applicable if a loan or a mortgage is repaid early.

Impaired Credit
Individuals with a poor credit rating could have impaired credit if they have been struggling to keep up with repayments or if they were declared bankrupt.

Judgement
A judgement is a ruling given within a court of law that will result in an obligation by one party.

Interim Order
Individuals who want to arrange a voluntary agreement with their creditors should apply to the court for an interim order. If the court grants an order, it will protect against bankruptcy and any other legal proceedings while in force.

Nominee
An individual or corporate debtor nominates someone to report on the proposal for an IVA or CVA.

Deed of Arrangement
A deed of arrangement is what an individual (not a company) uses to clear creditor debt bar formal bankruptcy. This method is no longer very popular, as Individual Voluntary Arrangements have surged in popularity.