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Glossary
Attachment of Earnings
This forces the debtor's employer to make deductions from the debtor's earnings
and pay them to the creditor.
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.
Bankruptcy
Bankruptcy is legal procedure for dealing with debts when you cannot pay.
Budget (Financial Statement)
A Budget is a document listing details of income and expenditure.
Budgeting
The process of managing outgoings so that they don't exceed income.
Budget Surplus
The amount on your budget by which your income exceeds your expenditure before
allowing for offers of payments on non-priority debts.
Budget Deficit
The amount on your budget by which your expenditure exceeds your income before
allowing for offers of payment on non-priority debts.
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.
Creditor
Someone to whom you owe money.
Credit Rating
A credit scoring systems which give points to items of information given on your
application form when applying for credit.
County Court Claim
Initial form sent by the court to a debtor when a creditor initiates court
action.
County Court Judgment
A County Court Judgment (CCJ) gives details of the court's decision of a
creditor's attempt to recover a debt in a civil court.
Debtor
Someone who owes money.
Debt Consolidation
This is taking a new loan and using the proceeds to pay off several smaller
debts.
Debt Management Plan
This is a repayment scheme administered by Consumer Credit Counselling Service
for people unable to pay their creditors the full contractual payments.
Debt Collection Agency
A company which collects debts on behalf of a creditor, or who buys the debt
from the original creditors.
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.
Direct Debit
The account holder instructs the bank or building society to comply with
requests from a third party to make a series of payments to them.
Downshifting
Making major changes to one's lifestyle caused by accepting a reduced level of
income.
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.
Irregular Bill
An occasional expense e.g. TV licence, car tax etcetera
Joint & Several liability
If two or more parties enter into a credit agreement they will each be liable
for repaying the whole amount borrowed.
Late Fees
Fees added to the amount owed by the debtor when payments are late and where
such fees are allowed for in the original contract.
Maximising Income
Increasing your income.
Monthly Expenses
The amount of money needed each month to pay your rent or
mortgage, your gas,
electricity and water, your food and other living expenses.
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.
Standing Order
This is an instruction signed by an account holder ordering a Bank or Building
Society to make regular payments from a account of specified amounts on
specified dates.
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.
Welfare Benefits
State funded allowances paid to those in certain defined circumstances including
low income and disability.
A Registered Charity www.cccs.co.uk
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