Jargon Explained: Red 2 Black Debt Management

Annual Equivalent Rate	This figure is shown as a percentage and is the calculation of what the interest rate would be if the interest was added to your account annually.
Annual Percentage Rate	This is the average interest rate, including fees and discounts, paid over the whole term of the borrowing.
Available Credit	Your available credit is how much you have left to spend on your credit / debit card, once your spent balance has been deducted from your credit limit.
Bailiff	A person who is licensed to confiscate goods to the value of your debt, they must have documents confirming that a court has sanctioned them to seize goods on behalf of a creditor.
Bankrupt	To become bankrupt means you have become insolvent and no longer have any money to pay your creditors. Bankruptcy is a legal process where all your main assets are sold to pay your creditors but it will also protect you from further claims.
Bankruptcy Petition	This is a application made to court to start bankruptcy proceedings by a debtor wanting to go bankrupt, or by a creditor wishing to pursue a debtor.
Bankruptcy Restriction Order	This is an additional restriction on bankrupts who are deemed to be blame worthy or have acted dishonestly.
Cash Limit	Your cash limit is the amount a lender will allow you to withdraw in cash.
Certificated Bailiff	This bailiff can retrieve goods for a wide range of creditors, for example rent arrears, un paid council tax and outstanding traffic fines.
Charging Order	This is applied for at court by a creditor and an order is placed on your property so if you sell the property the debt is paid first before you receive any of the proceeds.
Consolidation Loans	A consolidation loan allows you to move your debts (Loans, Credit Cards, Store Cards etc) to one single loan, this can also be known as a debt consolidation.
County Court Judgement	A judgement made in the county courts for a debt, creditors must obtain this judgement before they can instruct bailiffs to seize goods to repay the debt.
Credit Limit	This is the amount you can borrow on a credit card, this limit will depend on your credit score, employment status and income.
Creditor	Someone to whom a debt is owed.
Credit Reference Agency (CRA)	Creditors use a CRA to obtain information on your financial history. CRA�s hold data on UK residents covering how we operate our bank accounts, loans, mortgages and also hold reports on defaults and poorly run accounts.
Credit Report	Every lender will compile its own credit report on a potential borrower. Their decision to lend or the interest rate will depend on the results of the credit report debtor.
Debtor	A person who is debt to a creditor.
Default Notice	A default notice is a legal procedure and is a form sent by creditors giving a debtor seven days to comply with the action required by the creditor. It is not an intention (at this stage) of the creditor to take you to court.
Enforcement Agent	Another name for a bailiff.
Insolvency	This applies to someone who cannot pay their debts or cannot agree an informal repayment plan with their creditors. An insolvent person will inevitably be made bankrupt.
Insolvency Practitioner	Usually an accountant or solicitor who is authorised by the insolvency service to specialise in insolvency matters.
Insolvency Service	A government agency who regulates and advises on the insolvency industry and oversees any official receivers.
Loan To Value	This is the ratio between the amount mortgaged and the value of the property. Example, a loan to value of 60% means borrowing �60,000 to purchase a �100,000 property.
Minimum Payment	This is the amount required to be repaid each month on credit cards. It is usually set around 2% of your balance and if paid on time you will not incur any penalty charges however the debt would take the maximum period of time to pay off.
Monthly Repayment	The monthly repayment is the amount you repay on your credit card each month, the larger repayment the quicker you will pay off your debt.
Official Receiver	This person is employed by the insolvency service and is the officer of the court who deals with bankrupts.
Negative Equity	Negative equity occurs if the value of your property drops below the amount of the loan taken out to purchase the property. In effect you are paying for a property that is worth less than what you paid for it.
Overdraft	This is an additional form of borrowing, usually on a current account, lenders charge interest and if you exceed your overdraft limit heavy charges will apply.
Personal Loan	A fixed amount of money lent by a bank or other lender, this amount is generally unsecured and can be used to purchase items or to consolidate other debts.
Provider	A credit card company.
Secured Loan	A fixed amount of money usually borrowed against property, if you cannot repay the loan it guarantees the lender will get their money back by repossessing property.
Standing Order	An instruction made to a bank by the account holder to pay a sum of money to another account.
Statement Of Affairs	An official form asking for details on your financial situation, used by debt management companies to determine the disposable income.
Summons	A notice instructing you to attend a court hearing.
Uncertified Bailiff	A bailiff more likely to be used by the courts to pursue basic credit debts.
Unsecured Loan	A loan given without any security for the lender. Lenders make a judgement based on your credit score, should you not make your repayments they would have to start court proceedings to recover their debt.
Walking Possession Agreement (WPA)	This is an agreement made by a bailiff where you promise to pay some of your debt by way of a payment plan. In return the bailiff will leave the goods he wants to seize, should you breach the payment plan the bailiff will then use WPA to seize the goods.
Winding Up Order	This occurs when a creditor petitions the court for a compulsory winding up or liquidation of a company or partnership.