An A-Z Of Debt Collection Jargon (Part 2)

In our last blog post, we talked about the world of debt collection, and all the wonderful jargon it tends to collect. Particularly around businesses trying to collect money from their customers. And in the spirit of being transparent, we wanted to carry on our jargon-busting series, so that you can fully understand what’s going on, and what you need to do, should you need to take action. So without further ado, let’s dive right in!

D’s

Debt: The total value of money owed by a creditor.

Decree: A judgment issued in debt recovery claims by the court.

Debt Collection Agency: A third-party company employed by a creditor to collect an unpaid account from a debtor.

Debt Recovery Agency: A more specialist type of agency, usually dealing with more complex and disputed debt recovery cases.

Discretionary Limit: The maximum value of a single transaction covered by credit insurance. This amount will vary depending on your insurance company and level of coverage.

Dormant Company: A limited company that has either ceased trading, or has not started to trade yet.  These companies exist to stay on the ‘active company’ index, so that they can start trading quickly. They are also known as shell companies, that can be bought by start-ups.

E’s

Earnings Statement: This is similar to a profit and loss report – listing transactions, income and expenses over a 12 month period.

Enforcement: If a debt recovery case is brought to court and made successfully, but the debtor still refuses to pay, then an enforcement judgment might be issued. This means the court will make the defendant pay the money ordered, using methods like bailiffs, an attachment of earnings instruction, a charging order or a third party order of debt.

Ex-parte: Means ‘without attending’ – used in court documents when applications are made to court without anyone attending in person.

F’s

FCA: Also known as the Financial Conduct Authority. This is the regulator of the UK’s financial services industry, including debt collection.

Fraud: An individual or organisation that aims to deceive a person or business with inaccurate information in order to gain a competitive or financial advantage.

Fixed Assets: Both intangible and tangible assets other than the short term assets used to produce or supply services and goods, and not expected to be resold.

G’s

Guarantee: A promise in writing to fulfil contractual commitments.

Guarantor: Someone who agrees to pay a debt if the person who owns the debt fails to do so.

H’s

Holding Company: A non-trading company that has been formed to control a group of actively trading companies. This is also referred to as a ‘parent company’.  A holding company can’t be pursued by a debt collection agency to recover debts owed by a group company.

HMRC: Also known as ‘His Majesty’s Revenue & Customs’. This is the administering body responsible for the timely collection of consumer and business taxes. Businesses can owe money to HMRC, and can be pursued by debt collectors for money owed to them.

And that’s all for part 2! Be sure to keep an eye out for part 3, since we still have even more definitions of debt collector jargon to get through. In the meantime, if you have any questions about the debt collection process, or need advice on reclaiming a debt owed to you, please just get in touch with the team today to book your free consultation.