finance glossary, finance terms, finance guide

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	FINANCE 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 consolidation companies have cashed in on this principle, offering debt-ridden borrowers tempting deals backed by the value of their homes, but a key problem is that they can lose their home if they default on payments. Moreover, the interest rates charged are invariably higher than mortgage rates. 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. Loan Subordination Suspension of repayment of pre-existing loans made to the company, typically for a period of time. 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.

FINANCE GLOSSARY