Debt Glossary
Plain-English definitions of common debt and financial terms. Click any term to learn more.
AAdministration Order
A court order that allows someone with debts to pay them off through the courts over a set period, usually at a reduced rate. Interest is frozen. Suitable for those with a regular income who cannot pay debts in full immediately.
BBankruptcy
A legal process that writes off most debts if you cannot pay them. A court orders your assets (excluding basic necessities) to be used to pay creditors. Lasts typically 12 months, after which remaining debts are cleared. Appears on your credit file for 6 years.
CCCJ (County Court Judgment)
A court order obtained by a creditor when you owe them money and have not paid. If not satisfied within 30 days, it is registered on your credit file and can severely affect your ability to get credit, mortgages, or rentals. Can be set aside if served incorrectly.
CCIFAS Marker
A flag placed on your credit file by a lender or CIFAS (the UK's fraud prevention service) indicating suspected fraud or financial misuse. It can prevent you from opening new accounts. Can be disputed and removed if applied incorrectly.
DDebt Management Plan (DMP)
An informal arrangement where you pay a reduced amount to a DMP provider each month, who distributes it to your creditors. Not legally binding. Interest and charges may be frozen. Free DMPs are available through MoneyHelper, StepChange, and National Debtline.
DDebt Relief Order (DRO)
A government-backed debt solution for those with low income and few assets. You pay nothing for 12 months, after which qualifying debts are written off. Setup fee applies. Available if you owe less than £30,000 and have minimal assets.
DDefault Notice
A letter from a creditor warning that you have broken the terms of a credit agreement (e.g., missed payments). If the default is not remedied, the creditor can take further action, including registering a default on your credit file, which stays for 6 years.
IIVA (Individual Voluntary Arrangement)
A legally binding agreement between you and your creditors to pay a portion of your debts over typically 5-6 years. Remaining debts are written off at the end. Requires approval by 75% of creditors by value. Interest is frozen. Suitable for those with higher debt levels who can afford regular payments.
MMortgage Arrears
Money owed on a mortgage when payments have been missed. Lenders must follow strict FCA rules before taking possession action. You have rights — including the right to receive reasonable repayment offers and access to free advice. Seek help immediately if you are struggling with mortgage payments.
TTrust Deed (Scotland)
A Scottish equivalent to an IVA. A legally binding agreement to pay creditors over a set period. Protected Trust Deeds are registered with the Accountant in Bankruptcy. After the payment period, remaining debts are written off. Only available to Scottish residents.
TTTP (Time to Pay)
An agreement with HMRC to pay tax debts in instalments over a period of up to 12 months (or longer in exceptional cases). HMRC may agree if you can demonstrate you cannot pay immediately but can do so over time. Penalties and interest may continue to accrue.
VVulnerability
In financial services, vulnerability refers to circumstances that make someone more susceptible to harm — such as mental health conditions, physical health problems, bereavement, financial stress, or language barriers. FCA rules require firms to identify and support vulnerable customers.
WWritten-off Debt
When a creditor decides they cannot recover a debt and removes it from their records. This does not mean the debt never existed or that you do not owe it — creditors may sell it to a collection agency. Being contacted about a written-off debt does not mean you are free from the obligation.
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