Debt management Plan - Glossary

It can be ever so frustrating to finally set out to sort your financial matter and then come in face to face with legal and financial terms that sound like a new language. Here is a list of common terms to help you that you are most likely to come by in the process.

Bailiffs

These folks are people who are legally appointed by your creditors. They are allowed to enter the house to take possessions of your belongings to make repayments. However, you have your own rights as well. Be sure to check with either Consumer Direct or the CAB.

County Court Judgement

This is a legal ruling from the court. This requires you to pay back your creditors.

Credit History

Credit history holds all the information about your financial transactions. Money you have borrowed in the past. Money that you still owe or any failed repayments. This is used to work out your credit rating.

Credit Rating

A credit rating is used to give you a unique rating suggesting how investable you are. Credit companies will look at this rating to determine how much money you can borrow. There are a number of factors that are taking into account, your employment, banking, housing and other financial information.

Credit Reference Agency

These are companies that hold your credit data. The major ones in the UK are Equifax, Credit Expert, and Call-Credit. You can request your credit file from them for a nominal fee.

Creditor

Person or Company you owe money to.

Debt Management Plan

A debt management plan is an informal plan that will help you payback the money you owe. This is also referred to DMP. It is crucial to make repayments as this is not a legal binding.

Debtor

A debtor is someone who owes money. If you have borrowed money off someone, you are their debtor.

Loan Sharks

Loan Sharks are individual or companies that lend money on a high interest plan in order to make money on your account. Loan sharks usually will use violent forces or threats to get their repayments. You must try to avoid them and should you come across one, contact your local CAB to get help.