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Glossary of Financial Terms

Accountancy in bankruptcy
Is responsible for administering the process of personal bankruptcy and recording corporate insolvencies in Scotland.

Arrears
Arrears occur when you fail to meet your contractual bills. The most serious arrears are in relation to your electricity, gas and heating bills as serious missed payment can lead to these utilities being cut off.

Asset
Anything that belongs to the debtor that may be used to pay his/her debts (your home, car or savings)

Attachment of Earnings
If an individual has been served with a County Court Judgment but continues not to pay their debt, the creditor can apply to the Court for an attachment of earnings. If granted, the debtor’s employer will be ordered by the Court to make a deduction directly from the individual’s wages and pay this to the creditor.

Bankrupt
Someone against whom a bankruptcy order has been made and who has not been discharged from bankruptcy.

Bankruptcy
Bankruptcy is a formal legal procedure which an individual can use if they have debt that they are unable to repay.

Business Debt Help
There are a number of debt solutions available that can help a business that is experiencing financial problems. For more information – contact us now.

Citizens Advice Bureau
Offices where the public can obtain free advice on an extensive range of civil matters such as social security, debt and legal matters.

Client Account
The account where any monies are held on behalf of a client, these are kept in a ring fenced account which cannot be used for any other purpose.

Consumer Credit Act
The Consumer Credit Act 1974 requires most businesses that offer goods or services on credit or lend money to consumers to be licensed by the OFT.

Cooling Off Period
A cooling off period is an agreed period of time that you’re allowed to cancel an agreement after signing it without incurring any charges.

County Court Judgement
A County Court Judgement (CCJ) is an order by the Court requiring a debtor to pay what they owe to a creditor.

Credit File
A credit file records all forms of credit that an individual has been given and a history of the repayments that have been made.

Creditor
Someone owed money by an individual or company.

Credit rating
A credit rating estimates the creditworthiness of an individual, made by credit bureaus of a borrower’s overall credit history.

Credit Report
A credit report is a tool used by companies to decide on your credit worthiness.

Credit Reference Agencies
Credit reference agencies hold information about your credit agreements (including any arrears) and county court judgments (CCJs).

Debt
Any money owed to creditors.

Debt Arrangement Scheme
A Debt Arrangement Scheme (or DAS) is part of Scottish insolvency law. Similar to a debt management plan but it is a formal arrangement that can only be arranged via an approved money advisor.

Debt Consolidation
There are several ways to consolidate debts, they include re-mortgages secured and unsecured loans and debt repayment plans

Debt Help on Line
Debt help on line is readily available contact us now by submitting an enquiry to us.

Debt Help Scotland
There are a number of debt solutions that are only available to people living in Scotland, they include: Protected Trust Deeds, LILA and Debt Arrangement Schemes

Debt Management Help
Debt management help can be obtained from a number of free and fee paying organisations.

Debt Management Plan
A Debt Management Plan (also known as a DMP) is an informal agreement with creditors to reduce monthly debt repayments so that they are more affordable to the debtor.

Debt Management Companies
Debt management companies are organisations that will negotiate payment plans with your creditors. A fee may be charged for this service.

Debt Solutions
There are a number of debt solutions available to people living in Scotland, before you decide on the debt solution for you, make sure that a professional completes a financial review for you to help identify all suitable solutions available

Default
A default is a record on your credit rating of a missed payment. It can be recorded for any type of credit, including mortgage, store card, credit card, gas or utility bill etc.

Default Notice
This is formal letter advising an individual that they have not paid their debt and that they are in breach of their credit agreement.

Dividends
Dividends are payments made by a company to its shareholders, normally after the company has made a profit.

Discharged Bankrupt
Discharged bankrupt is the term given to an individual who has been discharged from their bankruptcy

Equity
The difference between the value of the property in the current market and the mortgage secured on it.

Free Debt Help
Free debt help and advice is available from the Citizens Advice Bureau

FSA
The Financial Authority is the regulator for Financial Service that authorises financial firms in the provision of financial advice to the public.

Guarantor
A guarantor is someone who agrees to pay a debt if the person who owns the debt fails to do so.

Government Debt Help
For government debt help contact www.aib.co.uk

Hire Purchase
Hire Purchase or HP is a form of financing the purchase of goods.

Incapacity Benefit
This benefit replaces the former invalidity benefit which is payable after the expiry of state sickness benefit if a person is still unfit for work.

Insolvency Practitioner
An Insolvency Practitioner (IP) is an individual who is licensed to carry out formal insolvency work.

Joint & Several Liabilities
When you take out credit with another person (such as your partner) you both become liable for the full amount of the debt. If one partner fails to make their payments, the other person named on the agreement becomes fully liable.

Liquidation
Liquidation is the act of closing down a Limited Company. The company’s trading is stopped and its assets are sold and turned into cash.

Letter of authority form
A form signed by a client to give a third party authority to contact a client’s creditors and to act on a client’s behalf.

National Debt helpline
The National Debtline is a national telephone helpline for people with debt problems in England, Wales and Scotland.

Net Income
The income that an individual takes home after all taxes, national insurance and other deductions

OFT
The OFT is the UK’s consumer and competition authority that protects consumers from bad practice in business.

Overdraft
An overdraft is usually provided by a bank and is an agreed amount of credit which is available when an account runs out of funds

Preferred Creditor
A preferred creditor is a creditor who will be paid first before other creditors in the case of an individual becoming insolvent or a business being put into liquidation.

Priority Debts
Priority Debts these are regular payments for items which include: mortgages, rent council tax and utility bills.

Redemption Penalty
Redemption penalties are paid to lenders if you repay money outstanding on credit before the term of your agreement has ended

Repossession
Repossession is the term generally used where a creditor claims property over which they have a charge due to the non-payment of a debt.

Restriction Order
A Restriction Order is an order by the court which stops the sale of an asset such as a property without the permission of the person who applied for the order (Insolvency Practitioner) or the court.

Secured Debt (Also see secured creditor)
Secured debt is a loan, given to an individual or company on the basis that if it is not repaid, the lender (or creditor) will be able to claim the asset on which the debt was secured. An example of this would be a mortgage. If the mortgage is not repaid, the lender has the right to take back the property (repossess) and sell it to get back the money they originally lent.

Sequestration
Sequestration is the Scottish term for Bankruptcy.

Trust Deed
A Trust Deed is an agreement (only available to people living in Scotland) with creditors to settle debt over an agreed period, usually 4 years.

Undischarged Bankrupt
Someone against whom a bankruptcy order has been made and who has not been discharged.

Unsecured Debt
Unsecured debt is money that has been lent to an individual without any security being taken against any of the assets that the individual owns.

Utility Bills
The bills for electricity, water, gas and telephone.

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