Debt, Arrears & Collections
Debt, arrears, defaults, collections, and repayment plan terms explained.
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A
Account in collections
An account that has been passed to collections due to non-payment.
Arrangement to pay
An agreement with a lender to pay less than the original amount for a period of time.
Arrangement to pay marker
A credit file marker showing you agreed reduced payments with a lender.
Arrears
A situation where payments are overdue and you are behind on what you owe.
Arrears level
A measure of how far behind you are on payments.
Arrears status
A label on your credit file showing an account is behind on payments.
Assignment of debt
The legal transfer of a debt from one company to another.
B
Breathing Space
A UK scheme that pauses most debt enforcement actions for a limited period.
Breathing Space moratorium
The period when most debt enforcement is paused under the UK Breathing Space scheme.
Broadband contract
A monthly agreement for internet service, usually with a credit check.
Budgeting plan
A structured plan for managing income and expenses.
C
Child maintenance arrears
Unpaid child maintenance payments that are overdue.
Collections
A stage where overdue debts are actively pursued for repayment.
Council tax
A local tax paid to councils for services such as waste collection.
Council tax arrears
Unpaid council tax that has fallen behind schedule.
Creditor
A person or organisation that is owed money.
D
Debt advice
Guidance that helps you manage or resolve problem debt.
Debt avalanche
A repayment method where you focus on the highest interest debt first.
Debt buyer
A company that buys unpaid debts and then collects them.
Debt collection
The process of recovering unpaid debts, often carried out by lenders or collection agencies.
Debt collection agency
A company hired or assigned to recover unpaid debts.
Debt management plan (DMP)
An informal agreement to repay debts at a reduced rate over time.
Debt purchase
When a lender sells a debt to another company.
Debt Relief Order (DRO)
A formal insolvency solution for people with low income and minimal assets.
Debt Relief Restrictions Order (DRRO)
An order that extends restrictions after a Debt Relief Order.
Debt snowball
A repayment method where you pay off the smallest debts first.
Debt write-off
When a lender decides not to pursue repayment of a debt, often after default.
Debt-to-income (DTI)
A ratio that compares your monthly debt payments to your monthly income.
Debtor
A person who owes money to a creditor.
Deed of assignment
The legal document that transfers a debt from one owner to another.
Default
A marker added to your credit report when a lender closes an account after missed payments.
Default balance
The amount recorded as outstanding when an account is defaulted.
Default date
The date a lender records an account as in default on your credit file.
Default marker
A credit file entry showing an account has been defaulted.
Default status
An account status showing a lender has formally defaulted the account.
Defaulted account
A credit account that a lender has marked as in default due to missed payments.
DRO cancellation
When a Debt Relief Order is ended early, usually due to changed circumstances.
DRO eligibility
The rules that determine whether you qualify for a Debt Relief Order.
DRO moratorium
The period when a Debt Relief Order is active and creditors cannot take action.
E
F
H
I
M
N
P
Partial settlement
A debt settlement where only part of the balance is repaid.
Partial settlement marker
A credit file marker showing a debt was settled for less than the full amount.
Payment holiday
A temporary pause in repayments agreed with a lender.
Payment plan
An agreed schedule to repay a debt over time, often at a reduced amount.
Payment plan review
A check-in to see if a debt repayment plan is still affordable.
Priority debt
A debt that has serious consequences if you do not pay, such as rent, mortgage, or council tax.
R
S
Score drop
A decrease in your credit score.
Secured debt
Debt that is backed by an asset, such as a house or car.
Settlement letter
A letter that confirms a debt has been settled or reduced.
Statute barred debt
A debt that is too old for a lender to pursue through the courts under UK limitation rules.
Statute barred letter
A letter used to respond when a debt may be too old to enforce in court.
T
Third-party debt order
A court order that takes money directly from your bank account.
Token payment
A small, temporary payment made when you cannot afford the full amount.
TV licence
A required licence in the UK for watching live TV or BBC iPlayer.
TV licence arrears
Unpaid TV licence fees that are overdue.
U
V
W
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