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Debt help glossary

Attachment of earnings, Bankruptcy, County Court Judgment (CCJ), Credit Reference Agency, Credit Score, Creditor, Debt Management, Debt Collection, Debtor, Insolvency/Insolvent.

Attachment of earnings

If you are not repaying debts as agreed through the Court they can notify your employer to deduct a certain amount before paying your wages which will then be used to repay your debts.


If you are unable to repay your debts it is possible for you to be declared bankrupt. In this case any assets you have can be used to raise money which is then distributed to your creditors. If you are a homeowner it is likely you will be expected to sell your property.

County Court Judgment (CCJ)

Creditors may take court action if they have problems communicating with you or getting you to make payments off your loans. This will usually result in additional costs being added to your debt. After considering your circumstances the Court will usually stop interest being charged and agree a regular amount that you should repay and this will be reflected in the Judgment(s). A CCJ will normally be recorded on your credit record for a period of six years.

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Credit Reference Agency

Credit Reference Agencies are supplied with information about you including the way you handle your existing debts. Any problems will be noted and could stop you getting credit in the future. Each reference agency will supply the record it holds about you for a small fee but you need to supply your name and all addresses at which you have lived in the past six years. If the information is inaccurate you can insist on a correction.

Credit Score

When you apply for credit, a mortgage or even to open a bank account, you may be credit scored. Points will be awarded for previous good credit handling, and you will also benefit from a good job and having lived for a long time at your present address. If you do not meet a minimum “score” you will be declined. Companies do not have to explain why they have turned you down but must give you details of any credit reference agency they have used.

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Someone – an individual or an organisation – to whom you owe money.

Debt Collector

This usually refers to an organisation that has been appointed to collect money you owe another firm. In some cases such an organisation will actually “buy” your debt and so replace the firm to which you originally owed money. Some may call at your home but there are laws governing what action they can take.

Debt Management Company

Usually refers to a firm that will help you to deal with all your creditors.


The individual(s) owing money.


Unable to repay debts.

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Adverse Credit

Adverse Credit is term referring to your credit rating, if you are described as having adverse credit you are deemed to be a less then ideal candidate to loan money to.

Annual Percentage Rate (APR)

The cost of credit that consumers pay, expressed as a simple annual percentage. These are the most effective way to compare loan offers you may receive.


Arrears are payments you have been unable or unwilling to keep up with, arrears are usually referred to in units of months. If you are two months in arrears then you owe two months payments. Arrears are always noted down on your credit record and can affect your future ability to obtain credit such as loans or credit cards.

Bad Credit

If you have bad credit you will find it hard to obtain such products as credit cards, loans and mortgages. Similar to adverse credit.


This is usually a final resort for anyone with dire debt problems, only ever recommended if all other avenues have been exhausted. Recommended beforehand would be debt management or an IVA.

Consumer Credit Act

A consumer credit act is a requirement for all financial businesses, it outlines a course of action from the office of fair trading, save under certain conditions.

County Court Judgment (CCJ)

If you have a CCJ it means a judge has ruled against you in court, this incurs a fine of the amount you owed plus any costs fine which must be paid off legally.

Credit Card

A card indicating the holder has been granted a credit limit. The holder can then purchase goods up to the limit agreed to with the creditor.

Credit Rating

our credit rating indicates how credit worthy you are, it can have a major bearing on whether you can obtain a loan, mortgage or credit cards. It lists all your credit activity, as in which loans you taken out, if they were paid on time, if you have any CCJs against your name or if you have gone through bankruptcy.


A creditor is a lender of finance such as a loan, credit card or mortgage.

Credit Search

A credit reference agency will search your credit record on behalf of a lender to see if you have any CCJs or defaults. This will give the lender an accurate description of how credit worthy an applicant is which in turn will inform there decision on weather you can have a loan and if so what APR to charge.

Data Protection Act (DPA)

The Data Protection Act was brought in to protect consumers’ personal information from being made available anybody wishing to buy it.

Debt consolidation

When you consolidate loans you replace a multiple of loans with a single loan, often with a lower monthly payment and a longer repayment period. It’s also called a consolidation loan.

Debt Management

Debt management is a financial agreement a company organises for you with your creditors, it allows you to lower your monthly payments in accordance to government legislation.


If you miss a payment to one of your creditors then you are in default. If you have a default on your credit rating it can damage your chances of getting a loan, credit card or mortgage.

Direct Debit

A direct debit is an arrangement made with your creditors and bank. It is a promise to pay a certain amount of money on a certain day or days of the month. They are an excellent way to stay on top of your finances and can help you save money through no late payments and often companies discount customers who use DD.


The equity you have in your home is the market value of set with the amount secured against it.

Fixed Rate Loan

A fixed rate loan is a loan that has its interest rate and APR fixed at the start and through the duration regardless of changes in market indexes or other interest rate fluctuations.

Flexible Rate Loan

A flexible rate loan is often easier to get as its interest can vary according to market index or other fluctuations in rates.


A guarantor will ‘guarantee’ any debt will be paid back for the primary lender, this may be because the primary lender cannot achieve the loan therefore the lender needs a guarantor for the loan.

Independent Financial Advisor (IFA)

A person qualified to give financial advice to clients on life insurance, pensions, funds, and other financial products, who is not tied to any one financial institution. They may charge their clients a fee for their advice or may receive a commission on the products which the client buys.

Interest Rates

The interest rate on a loan is the yearly price charged by a lender to a borrower in order for the borrower to obtain a loan. This is usually expressed as a percentage of the total amount loaned.

Legal Charge

The legal document held by Land Registry that records who has a claim on your property e.g. your lender.

Loan Application

A loan application is a form filled in when credit is required, it outlines the details of a borrower so the lender can judge the credit worthiness of the applicant.

Loan Consolidation

The bringing together of all loan debt into one payment, can save you time and money if done correctly.