Copy of `Debt Advice Leeds - Debt glossary`

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Debt Advice Leeds - Debt glossary Category: Economy and Finance > Debt advice Date & country: 28/03/2011, UK Words: 23

Bankruptcy Order
A bankruptcy Order is an order of the court, based upon a creditor's or debtor's petition, which make an individual bankrupt.

Bankruptcy Petition
A Bankruptcy Petition is the formal document, usually issued by the debtor himself/herself or by a creditor, which is submitted to the court. The petition sets out the amount of the debt due, the terms upon which default has been made, and the reasons why a bankruptcy order is sought.

Charging Order
A Charging Order is an order, made by the court, which gives the Trustee (of the order) a legal charge upon the debtor's interest in his/her home. The charge once made absolute continues even after a debtor is discharged from bankruptcy. A charging order cannot occur whilst in an IVA, as you are protected by the law.

Company Voluntary Arrangement (CVA)
A voluntary agreement for a company is a procedure whereby a plan of reorganisation or composition in satisfaction of debts, is put forward to creditors and shareholders. There is limited involvement by the court and the scheme is under the control of a supervisor.

Creditors
Creditors are an entity (person or institution) that extends credit by giving another entity permission to borrow money if it is paid back at a later date (credit card companies, catalogues). These people will ultimately decide whether to accept the IVA in a creditors meeting.

Creditors Meeting
The creditors meeting is where the creditors can vote in person or by proxy on whether to accept or reject the proposals of the IVA. Providing that at least 75% of the creditors accept the proposal, the IVA will be approved and all the creditors, including those who did not attend the meeting, did not vote or voted against the proposals, will be bound by the terms of the IVA.

Discharge
Discharge means freed from bankruptcy.

Insolvency
Insolvency is an individual or company that has insufficient assets to meet all liabilities or cannot pay their/its debts, as and when they fall due. An IVA assists such people to recover these debts.

Insolvency Act 1986 (IA 1986)
The Insolvency Act 1986 is a primary legislation governing insolvency law and practice. Nevertheless, many other statues and statutory instruments are also relevant.

Insolvency Practitioner (IP)
An Insolvency Practitioner (IP) is a specialist in an IVA who advises insolvent entities about how to deal with their financial difficulties and possible bankruptcy, IVA and liquidation procedures that may eventually be required. They will present your IVA case to the creditors.

Insolvent
Insolvent is the state of not being able to pay one's debts as they fall due, or having an excess of liabilities over assets. An IVA is an option when one becomes insolvent.

Insolvent Liquidation
A company goes into insolvent liquidation if it goes into liquidation at a time when assets are insufficient for the payment of its debts and other liabilities and the expenses of liquidation.

Interim Order
An individual who intends to propose a voluntary arrangement, such as an IVA to his creditors, may apply to the court for an interim order which if granted, halts bankruptcy and other legal proceedings whilst the order is in force.

IVA Advisor
The IVA advisor will work with you to put all your IVA details together.

Judge
A judge is a public official who hears and decides cases brought before a court of law. They can stop debt collectors from hassling you while the IVA case is presented. Also you are protected in the terms of the IVA from ever being bothered by your creditors or debt collectors again.

Legal Charge
A legal charge is a form of security to ensure payment of a debt.

Nominee
The nominee is the person chosen by the individual to report on the debtors proposals for an IVA. This will normally be the insolvency practitioner.

Preferential Creditor
A preferential creditor who is entitled to receive certain payments in priority to floating charge holders and other unsecured creditors. These creditors include occupational pension schemes and employees.

Proof of Debt
A proof of debt is a statutory form, completed by a creditor, which states how much that creditor is owed. The form is supplied by the appointed insolvency practitioner who is taking care of the IVA.

Realise
Realising an asset means selling it or disposing of it to raise money, for example in an IVA you may be required to sell an asset and obtain the money to contribute to your payments.

Secured Creditor
A secured creditor is a creditor who holds security, such as a mortgage or legal charge, has rights superior to those of an unsecured creditor providing that the security held is valid. If a creditor has any doubts concerning the validity of his security, immediate legal advice should be obtained. Secured debts cannot be entered into an IVA.

Statement of Affairs
A Statement of Affairs is a document sworn under oath and completed by the debtor or by a company representative which details the assets and liabilities of the legal entity concerned when it becomes insolvent. The offence of perjury is committed if the statement of affairs is deliberately misleading or erroneous. This is completed before the IVA begins.

Supervisor
The Supervisor is the person appointed to supervise the implementation of a debtor's, company's or partner's proposals for an IVA, CVA or PVA once approved by creditors (and members).