key words topic 5

Question 1

Administration order

Answer 1

A repayment plan arranged by county courts in England, Wales and Northern Ireland for people with less than £5,000 in unsecured debt and at least one county court judgment (CCJ) against them. They apply to the court to have an administration order issued, then pay what the court decides they can afford
directly to the court each month, and the court makes repayments to their
creditors.

Question 2

Arrears

Answer 2

An unpaid overdue debt.

Question 3

County court judgment (CCJ)

Answer 3

In England and Wales, a judgment issued by a county court to a person who does not respond to court action from a person or organisation to which they owe money. The CCJ affirms that the money is owed.

Question 4

Creditor

Answer 4

A person or an organisation to which a debtor owes money.

Question 5

Debt management plan (DMP)

Answer 5

A detailed plan drawn up by a debt management company (DMC) and sent to
an individual’s creditors. It sets out an affordable monthly payment shared between the creditors

Question 6

Debt relief order (DRO)

Answer 6

An order a person in specific circumstances can apply for if they cannot afford to pay off their debts. It generally lasts one year, during which time none of the people owed money can take action, and after which the listed
debts are cleared. Granted by the Insolvency Service, a DRO works out cheaper than going bankrupt.

Question 7

Discharged debt

Answer 7

When the debt has been repaid in full or a period of time has elapsed which means the debt will no longer have to be repaid.

Question 8

Hardcore debt

Answer 8

Debt that a person is not in a position to repay because their regular outgoings take up all their available income.

Question 9

Licensed insolvency practitioner

Answer 9

A company or person that sets up and supervises IVAs.

Question 10

Official receiver

Answer 10

An officer of the bankruptcy court who takes over the finances of a bankrupt.