Jargon buster

Plain-English definitions for the financial terms that come up most often in UK debt and benefits.

All terms

Arrears: Money that should have been paid by now but hasn't. Once a payment is missed, the amount owed sits in arrears until it is brought back up to date.

Bailiffs: People with legal authority to recover a debt that has gone to court, usually by visiting a home. The proper term in England and Wales is "enforcement agent"; Scotland uses "sheriff officers" and Northern Ireland uses "enforcement officers".
Breathing space: A government scheme in England and Wales that pauses most interest, fees, and enforcement on qualifying debts for 60 days while a person receives free debt advice. A longer mental-health crisis variant lasts as long as the crisis treatment plus 30 days.

CCJ: A County Court Judgment is a court order in England, Wales, and Northern Ireland confirming that a debt is owed. Once entered, it appears on the credit file and can be enforced by the creditor.
Charging order: A court order that secures a debt against a property the debtor owns. It turns an unsecured debt into one tied to the home, which the creditor can pursue when the property is sold.
CIFAS: A UK fraud-prevention service that holds a shared database used by banks, lenders, and insurers. A CIFAS marker on a credit file affects future credit applications until it expires.
CONC: The FCA's Consumer Credit sourcebook is the rulebook that every FCA-authorised consumer-credit firm (banks, lenders, debt collectors, debt-advice providers) must follow. CONC chapters set the forbearance, communication, and conduct standards firms apply when a customer is in arrears.
Creditor: A person or organisation that is owed money. Creditors can be banks, lenders, energy companies, councils, landlords, or HMRC.

Default notice: A formal letter a regulated creditor must send before they can take court action or pass an account to a debt collector. It states what is owed, how to pay, and when the default will be recorded.
DMP: A Debt Management Plan is an informal arrangement to pay reduced amounts to non-priority creditors over time. It is usually set up free of charge by a regulated debt-advice charity such as StepChange or Citizens Advice.
DRO: A Debt Relief Order is a formal insolvency option in England, Wales, and Northern Ireland for people with low income, few assets, and unsecured debts under a set threshold. After a 12-month moratorium the qualifying debts are written off.

FCA: The Financial Conduct Authority is the UK regulator that oversees consumer credit firms, banks, debt-advice providers, and debt collection. FCA authorisation is recorded on the publicly searchable FCA register.
Financial Ombudsman Service: The Financial Ombudsman Service is the free, independent UK body that resolves disputes between consumers and financial firms. It handles complaints about credit cards, loans, insurance, banking, and debt collection that firms have not resolved within eight weeks.
Forbearance: Steps a regulated creditor must take to support a customer who is in or at risk of financial difficulty, such as suspending interest, accepting reduced payments, or pausing collection activity. Forbearance is required by the FCA's Consumer Credit sourcebook for FCA-authorised creditors.

Insolvency: Being unable to pay debts as they fall due, or owing more than is owned. The formal insolvency options available depend on which UK nation a person lives in.
IVA: An Individual Voluntary Arrangement is a formal, legally binding agreement in England, Wales, and Northern Ireland to repay part of what is owed over a fixed period, usually five years. An IVA is set up through a licensed Insolvency Practitioner and stops most enforcement action once approved.

Liability order: A Magistrates' Court order in England and Wales (or Sheriff Court decree in Scotland) confirming that a council tax debt is owed. Once granted, the council can use enforcement agents, attachment of earnings, or deductions from benefits to recover the amount.

Non-priority debt: Debts where missed payments have less immediate consequences, such as credit cards, store cards, personal loans, and overdrafts. They still require attention, but they sit below priority debts in the order most free debt-advice services use.

Peaceable entry: The rule that enforcement agents in England and Wales may only enter a home through an unlocked door and may not force entry on a first visit. Once peaceable entry has been gained on a previous visit, the rules around return visits change for certain debt types.
Priority debt: Debts where missed payments can lead to the loss of a home, energy supply, transport, or liberty. Council tax, rent, mortgage, energy, court fines, child maintenance, and tax owed to HMRC are the most common examples.
Protected goods: Items that enforcement agents in England and Wales cannot lawfully take to recover a debt. The list includes tools of the debtor's trade up to a statutory limit, basic household items (cooker, fridge, microwave, table, beds, washing machine), pets, and goods belonging to other people.

Statute-barred: A debt that creditors can no longer enforce through the courts because the limitation period has run out. In England, Wales, and Northern Ireland the period is usually six years for unsecured debts; in Scotland it is five.

Vulnerable circumstances: Personal situations the FCA and enforcement-agent regulators recognise as requiring additional care, including serious illness, mental-health crisis, recent bereavement, carer responsibilities, and language barriers. Firms must adapt their conduct (forbearance, communication, withdrawal of enforcement) for customers in these circumstances.