Bankruptcy & Debt Glossary

A court order allowing you to pay missed debts through the court in one affordable monthly payment, usually used for CCJs under £5,000.

Payments you have missed or paid late on an existing debt, which build up over time and can trigger extra charges.

Anything you own that has monetary value — for example property, vehicles, savings or jewellery.

A court order that takes money for a debt directly from your wages before you receive them, used for some CCJs.

A person authorised to collect certain debts, sometimes by taking possessions to sell. They must follow strict rules and a clear notice period.

A legal process that writes off most of your unsecured debts if you cannot pay them, usually lasting one year from the date of the order.

A court-imposed set of restrictions that extends bankruptcy limits beyond the usual discharge period, usually for dishonest or reckless behaviour.

A statutory scheme in England & Wales giving you 60 days of legal protection from creditor action while you get professional debt advice.

A court order that secures an unsecured debt against an asset you own — often your home — so the creditor could force a sale (rarely for bankruptcy debts).

A court order confirming you owe a debt, issued when a creditor sues you. It stays on your credit file for six years.

Any person or business you owe money to — for example a credit card company, your bank, the council or HMRC.

An informal arrangement to repay your debts at an affordable monthly rate, usually set up free through a debt charity.

A formal debt solution for people with low debt (currently under £20,000), very little income and no assets. It freezes debts for 12 months then writes them off.

The person who owes money — used in legal letters and court documents to mean you.

A formal warning from a creditor that your account is in default — usually sent before further enforcement action.

The point at which your bankruptcy ends and most remaining debts are written off — usually 12 months after the bankruptcy order.

What is left of your income after essential living costs are paid — used to work out what you can realistically afford towards debts.

The amount of money you would keep after selling an asset and repaying any loan secured on it, used most often with property.

Items you are allowed to keep during bankruptcy — typically essential household goods, tools of your trade and a reasonable vehicle.

A one-off lump-sum offer to a creditor to clear a debt, often accepted for less than the full amount owed.

When paying a debt would leave you unable to meet essential living costs. Creditors must follow specific rules in genuine hardship cases.

A finance agreement where you hire an item (often a car) and only own it once the final payment is made.

A formal agreement to pay part of your surplus income to the Official Receiver during bankruptcy — usually lasts up to three years.

Like an IPA but imposed by court order if you and the trustee cannot agree on surplus income contributions.

A legally binding agreement with creditors to repay a portion of your debts, usually over five years.

A licensed professional who manages an IVA or trust deed and acts as your trustee in some bankruptcies.

Unable to pay debts as they fall due, or where your total debts are worth more than your total assets.

When a creditor stops adding interest or charges to your account so the balance stops growing while you sort a plan.

A debt taken out in two or more names where each borrower is jointly and fully responsible for the whole balance.

Money still owed to the lender after your property has been repossessed and sold, if the sale did not cover the outstanding mortgage.

When you owe more on a secured loan than the asset is worth — most commonly applied to mortgages.

A debt that is not secured against an essential need — for example credit cards, personal loans or catalogues. You still owe the money, but consequences of non-payment are less immediate.

The civil servant (part of the Insolvency Service) who administers your bankruptcy, takes control of your assets and reports to creditors.

An agreed borrowing limit on your current account that lets you spend more than you have in the bank.

A debt with serious consequences if unpaid — for example rent, mortgage, council tax, utility arrears or court fines. These should be addressed first.

A Scottish formal debt solution similar to an IVA, paying part of your debts over a fixed period (usually four years).

A loan tied to an asset — for example a mortgage or hire purchase. If you cannot keep up payments, the lender can take the asset back.

The Scottish equivalent of bankruptcy — the legal process that writes off unsecured debts when you cannot pay them.

The Scottish equivalent of an enforcement agent — authorised to serve court papers and recover certain debts.

A formal written demand for payment. If you ignore it (for £5,000+), a creditor can use it to start bankruptcy proceedings against you.

Money left after essential outgoings — a key number in deciding what, if anything, you pay during bankruptcy and into your IPA.

A small regular payment (often £1 a month) to a creditor while you sort a longer-term plan. It shows good faith and may pause further action.

The person responsible for managing your bankruptcy estate. In simple bankruptcies this is the Official Receiver.

Money owed that is not tied to an asset — for example credit cards, personal loans, overdrafts and catalogues.

When a debt is cancelled — you no longer owe the balance. Bankruptcy discharges most unsecured debts.