Topic 11 key terms(dealing with debt)

Question 1

administration order

Answer 1

definition: 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

Question 2

APR

Answer 2

definition: Annual percentage rate,the total cost of borrowing over one
year including any interest

Question 3

assets

Answer 3

definition: Things that a person or a business owns

Question 4

balance transfer

Answer 4

definition: Moving the balance on a card from one card provider to another

Question 5

bankruptcy

Answer 5

definition: situation in which a person cannot pay their debts and is the
subject of a court order that shares out their assets

Question 6

benefits

Answer 6

definition:government payment made to individuals who meet specific conditions to help them meet their living expenses

Question 7

budget

Answer 7

definition: A plan of expected incomings and outgoings over a set time period such as a month

Question 8

citizens advice

Answer 8

definition: A charity providing free, independent, confidential and impartial
advice on citizens’ and consumers’ rights and responsibilities

Question 9

consolidation loan

Answer 9

definition: 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

Question 10

county court judgement(CCJ)

Answer 10

definition: 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

Question 11

credit card

Answer 11

definition: card that allows the holder to make purchases face to face,
online or over the phone, and to withdraw cash from an ATM,transactions are paid by the card provider

Question 12

credit history

Answer 12

definition: A record of money borrowed and repaid by an individual,These
records are held by credit reference agencies and providers will check the individual’s credit history

Question 13

creditor

Answer 13

definition: person or organisation to which someone owes money

Question 14

debt arrangement scheme

Answer 14

definition: Scottish government-run programme similar to a debt management plan,involves arranging to make payments via a debt payment programme.

Question 15

debt management company

Answer 15

definition: organisation to which a person in debt (debtor) pays what
they can afford each month,theDMC then deals with the organisations (creditors) owed money

Question 16

debt management plan

Answer 16

definition: detailed plan drawn up by a debt management company,sets out an affordable monthly payment shared
between the creditors

Question 17

debt relief order

Answer 17

definition: 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

Question 18

debtor

Answer 18

definition: person in debt to an individual or organisation

Question 19

guarantor

Answer 19

definition: 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

Question 20

individual voluntary arrangements

Answer 20

definition: A formal alternative to bankruptcy comprising a contractual
arrangement with those owed money

Question 21

insolvency

Answer 21

definition: situation in which a person cannot repay what they owe because their debts are greater than their assets

Question 22

minimal asset process

Answer 22

definition: Available in Scotland similar to a DRO,the MAP is the route into bankruptcy for people with less than £2,000 in assets

Question 23

money helper

Answer 23

definition: independent organisation set up by the government to support people to make the most of their money and pensions

Question 24

mortgage

Answer 24

definition: loan taken out to pay for a property, usually over a long term such as 25 years

Question 25

overdraft

Answer 25

definition: facility that allows an account holder to withdraw more money than they actually have in their account

Question 26

recession

Answer 26

definition: period of at least six months when the amount of goods and services the country is producing is shrinking

Question 27

sequestration

Answer 27

definition: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 judgments for payment made against them.

Question 28

trust deed

Answer 28

definition: Available in Scotland and similar to an individual voluntary arrangement,insolvency practitioner helps people who are insolvent to make affordable repayments, and after three years any outstanding debt is written off

Question 29

utility

Answer 29

definition: essential public service, such as electricity,gas, water