Annual Percentage Rate (APR)
This represents the total charge for credit for each year of credit. It incorporates all interest and any additional charges or fees and represents the true cost of the borrowing.
Arrears
Overdue payments.
Assets
Any property, cash or valuable belongings.
Administration Order
A legally binding agreement whereby you pay an agreed amount to the court who will then distribute it to your lenders.
Attachment of Earnings Order
An Order instructing your employer to deduct an amount from your wages.
Bailiff
A bailiff can either be from a private organisation or an officer employed by the court. They can be authorised to enter property to take goods which can be sold to repay debts.
Bankruptcy
When you are declared bankrupt you are found to be legally insolvent. There is more information about bankruptcy in the ‘Regaining control of your finances' section.
Certificate of Satisfaction
You can apply (for a small fee) to be issued with a Certificate of Satisfaction upon successful settlement of a County Court Judgment which can then be provided to the Credit Reference Agencies to demonstrate that your account has been repaid.
Charging Orders
An Order made by the court allowing a charge on your property, which typically allows for settlement in the event of your house sale. However, non-payment could also result in your lender applying for an Order for Sale.
County Court Judgment (CCJ)
Lenders may take court action to recover a debt. This will usually result in additional costs being added to your debt. After considering your circumstances the court should usually set a monthly amount that you can afford to repay and should stop further interest being charged. A CCJ will be recorded on your credit record for a period of six years.
Credit Reference Agency
There are three main credit reference agencies operating in the UK. Each reference agency will provide the record it holds about you for a small sum but you need to supply your name (plus any previous names) and all addresses where you have lived in the past six years. The three main agencies are listed in the ‘Useful contacts' section.
Creditor/Lender
A creditor or lender is a person or company that is owed money.
Debt Collectors
This usually refers to an organisation that has been appointed to collect money owed to another company. In some cases they will actually “buy” your debt and replace the firm that you originally owed money to.
Disposable Income
The money you have left over after paying your day-to-day living expenses and household bills.
Equity
Equity is the value of the property minus the balance owing on any mortgage or loans secured on it.
Insolvency Practitioner
A person qualified to handle formal insolvency cases such as bankruptcy and IVAs.
Interest Rate
The interest rate is the charge made on the money you borrow from your lender.
Payment Holiday
An agreed break in repayments for a temporary period.
Priority Debts
The debts you must always pay first; those that keep a roof over your head, your utilities supplied and any Court, Council Tax, Maintenance, HP (where they are essential goods) or child support obligations.
Pro-rata Payments
Payments that are proportionate to the balance outstanding.
Protected Goods
Typically, when you take out a Hire Purchase agreement, if you have paid a third of the total owing, your lender cannot repossess the goods without a court order and they become ‘Protected'.
Secured Loan
A loan secured against an asset – typically your home.
Time Order
A Time Order is a way of asking the court to give you more time to pay a loan agreement (regulated by the Consumer Credit Act) if you have fallen behind with the payments. It can change the repayment amount, the repayment term or possibly the rate at which interest is charged.
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