12. Terms used when dealing with debt

There are several words and phrases that you may come across, from credit providers, the courts or bailiffs, for example, when you are in debt.

Administration order
When you make a single payment (or series of payments) to the court, which then distributes the money to the people you owe money to.

Arrears 
When you are behind with payments (for rent or a loan, for example).

Attachment of earnings
When you can have money taken out of your wages or benefits to pay off your debts.

Committal
Being sent to prison.

Suspended committal order If you are given a suspended committal order by the court because you have not paid your debts, it means that you won’t go to prison as long as you make payments of a certain amount that have been worked out by the court.

County Court Judgment (CCJ)
When the county court decides that a credit debt must be repaid, the creditor can use methods including bailiffs, a charging order and attachment of earnings (see above and below) to get you to do so.

Charging order Where the county court adds a credit debt onto your home (if you are a home owner or if you have a mortgage).

Conditional sale agreement A way of borrowing money to buy things, similar to hire purchase. See ‘Hire purchase (HP) problems’ for more information.

Creditor Someone you owe money to.

Default notice
A formal warning that you have missed payments on a credit debt, and that court action may be started against you.

Harassment
Where a creditor causes someone who owes them money ‘alarm, distress or humiliation’. They can be prosecuted for this, and lose their licence to carry on their business.

Individual Voluntary Arrangement (IVA)
A legally-binding way of making an arrangement with creditors to pay them back at an agreed rate, in return for them not taking court action against you.

Possession
The court order that allows a landlord or mortgage lender to take steps to evict you from your home.

Regulated agreement
A consumer credit agreement that is protected by the Consumer Credit Act 1974. It means that you are entitled to a properly-written credit agreement, a ‘default notice’ if you fall behind with payments before the creditor can take action against you, and the right to apply for a time order (see below).

Return order
When a county court forces you to return goods taken out under hire purchase to the creditor.

Time order
Something you can ask the court for to stop interest adding up on the money you owe, and to reduce the instalments you have to pay.

Warrant of execution
What a creditor does when they want to get bailiffs to get back the money you owe them.