Some of the jargon and legal meanings involved in debts and insolvency are confusing to many borrowers.
Here’s a quick guide to what some of the most common terms mean:
• IVA - this stands for ‘individual voluntary arrangement’ and refers to a legal agreement between a borrowers and their creditors to pay off some of the debt and write-off the rest.
• Bankruptcy - A bankrupt is someone who is unable to pay their debts and subject to a bankruptcy order made by a court. The order allows a trustee to take over a bankrupt’s property for distribution to their creditors
• Borrower - Someone who owes money to a creditor
• Creditor - Someone who you owe money
• Debtor - Another term for a borrower - someone who owes money to a creditor
• Financial management plan - an informal arrangement between a borrower and their creditors to repay debts
• Insolvency - A term describing someone who cannot pay their debts when they are due.
• Insolvency practitioner - Someone is licensed to act as an insolvency practitioner by a regulatory body, like a solicitor or accountant. An insolvency practitioner manages IVA s and bankruptcy.
• Official Receiver - An officer of the court who is a civil servant employed by government’s Insolvency Service, who deals with bankruptcies
• Priority debt - Spending like rent, mortgage, council tax, food and utilities
• Secured debt - A loan or mortgage linked to an asset, like a mortgage to buy a house
• Unsecured debt - Common unsecured borrowing includes personal loans, credit cards and store cards.
If you are looking for help with debt s, keep an open mind and do not assume bankruptcy is the only solution.
The best debt solutions are tailored to match someone’s personal financial circumstances - so an adviser will need to consider your income, assets, how much you owe and whether the debts are secured or unsecured.
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Notes to editors:
- Money Debt and Credit is one of the UK's fastest growing financial solution companies.
- The company was founded in 2006 on the belief that every client has the right to appropriate financial advice. Since then we've gone from strength to strength and have helped thousands of people with a variety of financial solutions.
- We offer a range of services including Financial Management Plans, IVA s, Loans, Mortgages, Full & Final Settlements, Bankruptcy, Investments and Pensions.
- Specialties: IVA s, Financial Management Plans, Loans, Mortgages, Trust Deeds, Full and Final Settlements, Bankruptcy
For more information or debt advice contact:
Money Debt and Credit
45 Clarendon Road, Watford, WD17 1SZ
Tel. 0800 16 999 46
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