Frequently Asked Questions

This is our jargon busting guide to the most commonly used terms when dealing with your debts.

What is an Administration Order?

An administration order is a court order placing a company that is, or is likely to become, insolvent under the control of an administrator following a petition by the company, it's directors or a creditor. The purpose of the order is to preserve the companys business and assets to allow a reorganisation or ensure the most advantageous realisation of its assets whilst protecting it from action by it's creditors. The administration of the insolvent estate of a deceased debtor. County court process permitting an individual with modest debts to pay off installments. No insolvency practitioner is involved.

What is Joint and Several Liability?

If more than one person enters into a credit agreement then both are liable for the full amount. For example, after divorce or separation, both parties can be pursued for the outstanding amount. This also applies to rent arrears on joint tenancies, arrears on joint mortgages, Council Tax payment and water rates on properties that have been jointly occupied.

What is a Default Notice?

Must be issued by a creditor before he can start legal action to recover a debt. It states the amount of money owing and the amount required from the debtor to put things right. It asks for payment in full in seven days. If the seven days pass without payment, the creditor can take court action.

What is a Liability Order?

If you fail to pay your Council Tax, your local authority can apply to the Magistrate's Court for a Liability Order. The Order gives the Council extra powers to enforce collection of the money.

What are Priority Creditors?

Those where non–payment could result in loss of property, essential services or imprisonment, e.g. mortgage, rent, gas, water, electricity, Council Tax, court fines and maintenance.

What are Non Priority Creditors?

Non–payments to these creditors (sometimes known as secondary creditors) would incur less severe consequences than the non–payment of priority creditors.

What is Secured Lending?

A loan where security is given by the person borrowing (the security is usually property). If you fail to repay a secured loan the property maybe repossessed. These debts take priority over unsecured lending.

What is a Time Order?

A time order allows a County Court to make changes to the terms of a regulated agreement, if it appears to be just. The court can reduce the repayment rate and the interest rate. Time Orders are normally only made where there is a temporary financial difficulty and if you are likely to be able to return to making full contractual payments.

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