Understanding debt jargon

By Mr Bankruptcy

10th July 2020

Many industries and professions have their own specific words and terminology. For those who aren’t a regular part of that industry, jargon can be an impregnable barrier to understanding what’s happening and what you need to do.

If you find yourself with an unmanageable debt for the first time, you’ll come across a whole new vocabulary use by debt professionals around debt, insolvency, bankruptcy and potential ways out. To give you a head start, here’s an overview of some key terms you may hear.

Key terms in debt management

These are some of the more common terms you may come across:

• Debtor: A company or person who owes money.
• Creditor: A company or person to whom money is owed.
• Liability: Money owed to another person or company.
• Insolvency: A situation when a business cannot pay its debts or when it’s debts (liabilities) are greater than its assets or funds.
• Administration: When an insolvency practitioner takes over the running of a company to assess its viability.
• Liquidation: The process of selling a business’s assets after it has failed to pay its debts, the money raised from the sale used to pay creditors.
• Winding Up Petition: An application to liquidate a company presented to the court by one of its creditors.
• County Court Judgement (CCJ) – Applied for by creditors, this is an order given by a county court to debtors to repay monies within a set time. This is part of the civil, not criminal, justice system.
• Debt Management Plan: An informal agreement with creditors, with the aim of clearing owed debts.
• Bankruptcy: A legal term for a process that allows debts you cannot repay to be written off.
• Company Voluntary Arrangement (CVA): A contractually binding agreement allowing a company to come to an arrangement to pay off a debt over a specified period of time.
• Individual Voluntary Arrangement (IVA): A contractually binding agreement between an individual and their creditors to pay debts over a specified period of time.
• Interim Order: When applying for an IVA, this prevents creditors from taking legal or bankruptcy action while the arrangement is being agreed.

Get advice, not jargon

Getting to grips with debt is daunting and the use of unfamiliar words and terms does nothing to help an already stressful situation. The use of an excessive amount of jargon impedes clarity for clients, which can put them off asking questions. That’s why, at James Rosa Associates, we give clear advice in plain English to help you become debt free and we ensure industry jargon doesn’t keep you in the dark.

James Rosa Associates

James Rosa associates is a firm of debt advisors and debt adjustors. With a supportive and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors facing unmanageable debt or involved in civil or commercial disputes.

Our services include:

● Insolvency support

● Negotiated settlements

● Personal assisted bankruptcy

● Mediation

We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.

Find out if you qualify for a free consultation

If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.

Please be advised that all views expressed in these posts are those of the author and not of James Rosa Associates ltd.