TOPIC 11 Flashcards
Administration order
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 judgement (CCJ) against them.
Bankruptcy
A situation in which a person cannot pay their debts and is the subject of a court order that shares out their assets between
their creditors.
Consolidation loan
A loan used to pay off a number of different debts, meaning that there is then only one payment to make each month, to the loan
company.
CCJ (County court judgement)
In England and Wales, a judgement 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.
Debt arrangement scheme
A Scottish government-run programme similar to a debt management plan.
DMC (Debt management company)
An organisation to which a person in debt (debtor) pays what they can afford each month. The DMC then deals with the
organisations (creditors) owed money.
Debt management plan
A detailed plan drawn up by a debt management company (DMC) and sent to an individual’s creditors (entities they owe
money). It sets out an affordable monthly payment shared between the creditors.
DRO (Debt relief order)
An order a person in specific conditions 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.
Guarantor
Someone who undertakes to repay a financial obligation if the person who took on the obligation in the first place cannot or
does not repay it.
MAP (Minimal assets process)
The MAP is the route into bankruptcy for people with less than £2,000 in assets.
Sequestration
The term for bankruptcy in Scotland, which applies to people who owe more than £1,500, have not been bankrupt in the last
five years and have had court judgements for payment made against them.
Trust deed
Available in Scotland and similar to an individual voluntary arrangement (IVA). An insolvency practitioner helps people who
are insolvent to make affordable repayments, and after three years any outstanding debt is written off.
