Jargon Buster

Bailiffs

Bailiffs are officers of the court, who can in certain circumstances be used by creditors to enforce judgments by collecting debts and repossessing homes or goods.

Charging Order

This secures the debt on your home usually with conditions concerning payments. A charging order has the effect of converting an unsecured debt into a secured one.

County Court Claim

Initial form sent by the court to a debtor when a creditor initiates court action.

Credit Rating

A credit scoring systems which give points to items of information given on your application form when applying for credit.

Creditor

Someone to whom you owe money.

Debt Collection Agency

A company which collects debts on behalf of a creditor, or who buys the debt from the original creditors.

Debtor

Someone who owes money.

Default Notice

This must be issued by creditors in respect of debts covered by the Consumer Credit Act 1974 before any further action is taken.

Deficit

The amount on your budget by which your expenditure exceeds your income before allowing for offers of payment on non-priority debts.

Hire Purchase

An agreement where goods are hired for an agreed period, at the end of which the hirer has the option to purchase.

Individual Voluntary Arrangement (IVA)

A means of protecting yourself from your creditors by entering into a legally binding agreement supervised by an Insolvency Practitioner.

IP

The person (usually an accountant or solicitor) authorised by the Department of Trade and Industry (DTI) or a recognised professional body to act as trustee, nominee and supervisor. Only such a person can hold any of these offices.

Joint & Several liability

If two or more parties enter into a credit agreement they will each be liable for repaying the whole amount borrowed.

Non-Priority Debts

Non-Priority Debts are those where the creditor cannot deprive you of liberty, home or essential goods and services.

Priority Debts

Priority debts are those where non-payment gives the creditor the right to deprive you of your liberty, home or essential goods and services.

Repossession

Process by which a creditor with a loan secured on house or goods (e.g. car) can take possession if you do not maintain agreed payments.

Secured Loan

Where the lender has a legal charge on assets (usually a house) giving rights of repossession over that asset if payments on the loan are not maintained.

Surplus

The amount on your budget by which your income exceeds your expenditure before allowing for offers of payments on non-priority debts.

Unsecured Loan

A loan that is not secured on property or goods.

Warrant of Execution

This is issued by the County Court at the creditor's request allowing the court bailiffs to attempt to take and sell goods and use the proceeds to pay the debt.

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