Glossary / Business

Debt Glossary

Abandonment: The voluntary relinquishment of ownership by failure to use the property, coupled with intent to aba
Add On Interest: Add on interest is a method of charging interest. Interest is computed on the total amount borrowed
Amortization: Amortization is payments of debt in equal instalments of principal and interest, rather than interes
Annual Percentage Rate (APR): The yearly interest percentage of a loan, as expressed by the actual rate of interest paid. For exam
Arrears: A payment made after it is due is in arrears. Interest is said to be paid in arrears since it is pai
Arrestment Arrestment: Means that money or goods held by a third party are 'frozen'. The most common example is arrestment
Asset: An asset is property that belongs to an individual. Including; real property (land or buildings) and
Attachment: Means that goods held by the person in debt, eg a car, are 'frozen'. Anything that has been frozen (
Average Life: The length of time that will pass before one-half of a debt obligation has been retired.
Balance: The amount of money in an account, equal to the net of credits and debits at that point in time for
Bankruptcy: A form of debt relief, there are two kinds of bankruptcy. Personal bankruptcy: an individual, sole t
Beneficial Loan: A loan made by an employer to an employee on which interest is either not charged or is less than th
Beneficiary: The Person who is entitled to receive funds of property under the terms and provisions of a will, tr
Benefits: Benefits are paid to you by the state and include income support, child benefit, job seeker's allowa
Binding: For example, an agreement, which is binding cannot be legally avoided or stopped.
Budget: A list of all your income and expenditure is a budget.
Budget Deficit: A deficit is the gap between spending and revenue and thus the amount that may need to be borrowed.
Building Society: 'Mutual' non-profit-making institutions set up to lend money to their members for house purchase. Bu
Cap Rate: The discount rate used to determine the present value of a stream of future earnings. Typically this
Cashcash: Is currency and coins on hand, bank balances, and negotiable money orders and checks.Ceiling The max
CEO Chief Executive Officer: Is the executive who is responsible for a company's operations, usually the President or the Chairma
Classified Property Tax: Property tax which varies in rate depending on the use of the propertyCredit Credit is an agreement
Creditor: A creditor is an individual or a company that is owed money by another person.
Currency: Any form of money that is in public circulation
DAS Administrator: The Accountant in Bankruptcy is the DAS administrator. They are responsible for maintaining the DAS
DAS Approved Money Adviser: A DAS approved money adviser is a general money adviser who has received further training (and been
Death Benefit: 0
Debt: Means any money that is owed or due to someone else.
Debt Capital: Debt Capital is the capital raised through the issuance of bonds.
Debt Consolidation: Debt consolidation is the replacement of multiple loans with a single loan, often with a lower month
Debt Payment Program (DPP): An agreement under the Debt Arrangement Scheme (DAS) that allows you to pay off your debts over an e
Debt Relief: The last resort for a debtor when dealing with debt where the debtor cannot pay their debts - bankru
Debt-Equity Swap: Debt equity swap is a transaction in which existing bonds (debt) are exchanged for newly issued stoc
Deduction: An expense subtracted from adjusted gross income when calculating taxable income, such as for state
Default Notice: This is a letter reminding a debtor that they haven't paid their debt. This must be issued by a cred
Demand: The lender's statement of the amount due to pay of a loan.DiligenceWe all rely on people keeping the
Diligence Stopper: A court order which stops the operation of existing diligence and prevents future diligence.
Direct Debit: An instruction you give to your bank or building society to make regular payments from your account
Disclaimer: A statement made to free oneself from responsibility.
Discounted Loan: A loan on which the interest and financing charges are deducted from the face amount when the loan i
Earnings: Revenues minus expenses and taxes. Also called income.
Earnings Arrestment: If you are working, the money you owe to a creditor can be taken from your wages/salary directly fro
Endowment: A permanent fund bestowed upon an individual or institution, such as a university, museum, hospital,
Entitlement: Benefits guaranteed to an individual, such as dividends for shareholders or government aid for those
Equity: The value of a person's interest in real property after all liens and charges have been deducted.
Fee: A charge for services rendered
Final Salary: The basis of determining a person's pension entitlement in a final salary scheme and which normally
Finance: Finance deals with matters related to money and the markets.
Flexible Mortgage Account: A combined mortgage and current account. Any savings each month earn the mortgage rate, which is a r
Frozen Account: A bank account whose funds may not be withdrawn until a lien is satisfied or an ownership dispute is
Funds: A pool of money normally set apart for a purpose, for example, a pension fund to provide pensions.
Gold Card: A plastic payment card which normally allows the holder higher spending limits over the standard car
Grace Period: The period, normally 30 days, during which an insurance policy remains in force even though the prem
Grant: Funding for a non-profit organization, usually for a specific project.GranteeOne to whom a grant is
Gross Income: The scheduled (total) income, either actual or estimated, of a person before deductions. This for ex
Growing Equity Mortgage (GEM): A fixed rate, graduated payment loan allowing low beginning payments and a shorter term because of h
Guarantee: A commitment made by a person to be answerable for the debts or liabilities of another.
Hidden Asset: Asset not immediately apparent from a balance sheet.High equityA mortgage which is low in comparison
Hire Purchase (HP): The pre-agreed purchase of an asset where the asset e.g. computer is in your possession as long as r
Holder: A person in possession of a negotiable instrument such as a bill of exchange or promissory note. Tha
Incapacity Benefit: A state benefit payable after the expiry of state sickness benefit if a person is still unfit to wor
Income Tax: In most countries income tax is progressive on successive slices of income, so that the more you ear
Inland Revenue: The government department responsible to the Treasury for the collection of direct taxes which inclu
Insolvent: Unable to meet debt obligations.
Instalment: The regular periodic payment that a borrower agrees to make to a lender.
Insured Mortgage: A mortgage insured against loss to the mortgagee in the event of default and a failure of the mortga
Interest: The fee charged by a lender to a borrower for the use of borrowed money, usually expressed as an ann
Interest Cap: The maximum interest rate increase of an Adjustable Mortgage Loan. For example: a 120% loan with a 5
Interest Rate: The percentage rate at which interest is charged on a loan or paid on savings etc.
Joint: Pertaining to multiple parties on the same side of an agreement or transaction.
Joint Account: Typically a bank or brokerage account in the names of two (or more) people. Arrangements can be made
Joint Liability: The legal liability of two or more people for claims against or debts incurred by them jointly. If t
Late Charge: A charge imposed by a lender to a borrower when the borrower fails to make payment on the due date.
Laundry (Money): The manipulation of money obtained in a wrongful manner, for example theft, so as to seem to have or
Lease: A contract in which the legal owner of property or other asset agrees to another person using that p
Legacy: Another term for bequest, that is, the making of a gift by will. In the main there are three main ty
Lender: A person or company that offers to lend money to a borrower for a given period of time. The borrower
Liability: The debts of a person or company
Liability Insurance: Insurance against legal liability to pay compensation and court costs where the insured has been fou
Life Assurance: An insurance policy which, in return for the payment of regular premiums, pays a lump sum on the dea
Limited (LTD): Ltd' after a company name indicates that the company is privately owned with 'limited liability' sta
Liquid Assets: Cash plus assets which can readily be converted into cash.
Liquidated Damages: A definite amount of damages, set forth in a contract, to be paid by the party breaching the contrac
Loan: An advance of money from a lender to a borrower over a period of time. The borrower is obliged to re
Loan Account: An account, opened for a customer by a bank, following the granting of a loan. The amount of the loa
Loan Policy: A title insurance policy insuring a mortgagee, or beneficiary under a deed of trust, against loss ca
Loan Ratio: The ratio, expressed as a percentage, of the amount of a loan to the value or selling price of real
Loan Sharking: Charging an illegally high interest rate on a loan.
Lower Earnings Limit: The level of income at which employees start to pay Class 1 National Insurance contributions.
Lump Sum: A sum of money paid in a single instalment.
Maximizing Income: Increasing the amount of income you earn.
Money Adviser: Someone who is trained to offer advice both on debt and on increasing your income. A money adviser c
Money Broker: A type of agent who arranges short term loans between banks (which are seeking to lend money) and bo
Mortgage: A loan in which the borrower (the mortgagor) offers a property and land as security to the lender (t
Mortgage Broker: A person or company engaged in the arrangement of mortgages for buyers. The broker is usually paid a
Mortgage Protection: Term assurance to cover the repayment of a mortgage in the event of the death of the mortgagor durin
National Debt: The total debt accumulated by a government through the issue of government bonds, Treasury bills and
National Insurance: A form of taxation, payable by employees, employers and the self employed, which is notionally to fu
Negative Equity: A situation where the purchaser of a property has taken out a mortgage and some time after the purch
Negotiable: The ability to be sold or transferred to another party as a form of payment. Something which is nego
Net Assets: Total assets minus total liabilities of an individual or company.
Net Income: Net profit attributable to ordinary shareholders after the deduction of all other charges.
Net-After Deductions: An amount of money e.g. income you take home after income tax, national insurance contributions, pay
Nominee: The person, bank or brokerage in whose name securities are transferred.
Notarization: The certification by a Notary Public that a person signing a document has been properly identified.
Notary Public: A person authorized to notarize certain documents.
Obligation Bond: Mortgage bond whose face value exceeds the value of the underlying property, and for which a persona
Ombudsman: Ombudsmen do not have any formal power to reverse decisions but they have substantial moral authorit
Open End Mortgage: A mortgage permitting the mortgagor to borrow additional money under the same mortgage, with certain
Open Interest: The net amount of outstanding open positions, either long or short, in a given futures or options co
Ownership: Rights to the use, enjoyment, and alienation of property, to the exclusion of others. Concerning rea
Partial Release: Partial Release is a mortgage provision allowing some of the pledged collateral to be released if ce
Pass Book: A book of recorded transactions in a savings account, issued by banks and building societies in whic
PAYE (Pay As Your Earn): People who earn income from employment or who receive a pension are liable for income tax under the
Payment Cap: A Payment Cap is the maximum amount for a payment under an Adjustable Mortgage Loan, regardless of t
Pension Mortgage: A personal mortgage is a type of personal pension plan which utilises the tax free lump sum entitlem
Personal Allowance: Tax allowances are concessions by the Inland Revenue which can be used to reduce a person's Taxable
Personal Equity Plan: A plan where people over the age of 18 could formerly invest in the shares of state and companies vi
Personal Income: Personal income is a person's total income which includes salary, transfer payments, dividend and in
Personal Loan: Loans available from banks and other financial institutions to private individuals for personal use
Personal Possessions: The personal possessions of a deceased person which pass to the beneficiary or beneficiaries of the
Postal Account: A personal account is a building society account in which all transactions are conducted via post. I
Power Of Attorney: A document which authorises a person to act on behalf of another is a power of attorney.
Privatization: The sale of government-owned equity in nationalised industries or other commercial enterprises to pr
Property Tax: Local tax assessed on property owned, such as real estate or automobiles.
Public Sector Net Cash Requirement: Formerly known as Public Sector Borrowing Requirement (PSBR), PSNCR is the difference between the ex
Quick Assets: Cash and other assets which can or will be converted into cash fairly soon, such as accounts receiva
Re Mortgage: To re mortgage is arranging alternative finance for the purchase of a property which is already mort
Real Asset: An asset that is valuable because of its utility, such as real estate or physical equipment.
Receiver: A person appointed by a court to finalize the affairs of a company and to utilise assets to pay its
Repayment Mortgages: A mortgage where throughout the term, regular payments are made to partly repay interest on the capi
Revenue Account: An investment trust term referring to analysis of investment income.
Reverse Mortgage: An arrangement in which a homeowner borrows against the equity in his/her home and receives regular
Roll Over Mortgage: Mortgage for which the unpaid balance is refinanced every few years at then-current rates is a roll
Salary: Wages received on a regular basis, usually weekly or monthly. Sometimes the term is used to include
Savings Account: An account with a bank or financial institution which pays interest on balances held, usually once o
Second Mortgage: A second mortgage is taking out a mortgage on a property which is already mortgaged. This can be use
Secured Loan: A loan which is backed up by assets belonging to the borrower (normally property) in order to decrea
Sole Trader: An individual proprietor of the simplest form of business, e.g. a shop owned and run by a single per
Standing Order: An instruction you give to your bank or building society to make regular payments from your account
Surplus Income: This means the amount of money which you have left over when you subtract necessary expenditure from
Tax Codes: Under the PAYE system of taxing income, tax codes are allocated annually to employees. These codes e
Tax Credits: Tax you receive back in certain circumstances, e.g. pension credit, child tax credit and working tax
Taxable Earnings: The amount of an individual's annual income on which tax is payable defined as: Taxable earnings = I
Taxable Pay: (gross salary less pension contributions less allowances) is used by the employer to calculate a per
Trust Deed: A form of debt relief where you're unable to pay your debts but have money tied up in assets, such a
Trustee: Usually an accountant (a qualified insolvency practitioner), a trustee acts for the creditors by man
Trustee In Bankruptcy: One appointed by a bankruptcy court, and in whom the property of the bankrupt vests. The trustee hol
Trustor: The borrower under a deed of trust is a trustor.
Unsecured Creditor: A creditor who does not hold security (such as a mortgage) for money owed.
Unsecured Loan: An unsecured loan is a loan where the lender has no entitlement to any of the borrower's assets in t
Value: The worth or desirability of something expressed as an amount of money.
Variable Interest Rate: Interest rates offered by banks and financial institutions on loans or deposits which are liable to
Wrap Around Mortgage: A second or junior mortgage with a face value of both the amount it secures and the balance due unde

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