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Acid Ratio Test A term used to measure the short-term ability of a business to meet its obligations. It is calculated as current assets, less stocks and work in progress, divided by current liabilities
Administrative Receiver
Appointed by a creditor under a specific power arising under the terms of a fixed or floating charge. The receivers duty is to realise the value of the asset charged for the benefit of his creditor/client. A company can continue to trade while in receivership but it cannot prevent a petition for its winding-up being presented to the court. An administrative receiver must be an authorised insolvency practitioner.
Annual Fee A yearly fee charged by credit grantors for the privilege of using a credit card.
Annual Return
 It is a legal requirement that a limited company must draw up an annual summary of its capital and shares, together with an up-to-date list of directors and members (shareholders) including their names, addresses and number of shares held, occupation and other directorships of a director and statement of the indebtedness of the company in respect of secured charges.
Annual Percentage Rate
Often abbreviated to APR - the cost of credit at a yearly rate.
A person applying for credit privileges, employment or some other benefit.
Anything you own that has value or use.
Account Holder
The person authorised by the contractually responsible party to use the account.
A proceeding in UK Courts that may legally release a person from repaying debts owed.  
Bankruptcy Discharged
A court order terminating bankruptcy proceedings on old debts.
Bankruptcy Dismissed
A court order that denied one's bankruptcy petition making the debtor still liable for all debts.
A financial plan for saving and spending money.
Charge Card
A card which requires payment in full upon receipt of the statement.
 Consumer Credit Association
Charge Off
Accounting term to indicate that the creditor does not expect to collect a balance owing on an account.
Charging Order
 A form of proceedings to enforce a judgment, which attaches to property, normally land or shares, owned by the debtor. The charging order operates like a mortgage in that it is usually used to secure payment by instalments. Upon default an order for sale may be made
Collection Account
Refers to the status of an account owed to a creditor when it has been transferred from a routine debt to a Collection Department of the creditor's firm or to a separate professional debt collecting firm.
Collatoral Security
Security in the form of stocks and shares, deeds of property or other acceptable substitute deposited by a borrower as a guarantee that a loan will be repaid.
Consolidation Loan
A loan usually obtained for the purpose of reducing the amount of the payments of bills owing by consolidating the bills into one loan payment. The consumer pays off several bills with the proceeds from one loan and is left with one consolidated monthly payment.
Compound Interest
Interest calculated on the principal sum of a debt, plus any interest that has accrued in previous periods. At each point interest is added, the total becomes the new sum on which subsequent interest is calculated.
Property acceptable as security for a loan or other obligation.
Person who uses and/or buys goods and services for family or personal use.
Controlling Interest
A company is said to have a controlling interest in another company when it holds more than 50% of the shares voting rights.
Consumer Credit Counselling Service
Organisations which help consumers find a way to repay debts through careful budgeting and management of funds. These are usually nonprofit organisations, funded by creditors. By requesting that creditors accept a longer pay-off period, the counselling services can often work out a successful repayment plan.
A trust or a promise to pay later for goods or services purchased today.
Credit Card
A rectangular piece of plastic used instead of cash or cheques authorising payment for goods and services.
Credit Grantor
Person or business furnishing consumer goods and/or services on credit.
Credit History
Record of how a consumer has paid credit accounts in the past, used as a guide to determine whether the consumer is likely to pay accounts on time in the future.
Credit Limit
The maximum amount of money you can charge on a particular credit account.
Credit Repair Companies
Individuals or Companies that promise to "clean-up" or "erase" your bad credit and give you a fresh start. Also know as Credit Clinics.
Credit Report
A record or file to a prospective lender or employer on the credit standing of a prospective borrower, used to help determine credit worthiness.
Credit Reporting Agency
A company which gathers, files and sells information to creditors and/or employers, to facilitate their decisions to extend credit or to hire.
Capital Fully Employed
The company’s resources are fully extended; shortage of cash. This is one of the terms used by banks when answering status enquiries.
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Debit Card
Purchases are deducted directly from the consumer's personal bank account.
Debt Collection Agency
 A company which provides a debt recovery service for the recovery of overdue accounts for their clients.
 Dormant Company
 A limited company that has never started, or has ceased, its trading activities but has not been dissolved. Annual returns are still filed, but the accounts state that the company did not trade during the year. A company is kept on the “live index” in this way, so that it can be easily reactivated if it wants to start trading again in the future
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Once a debt has been sued for successfully and judgment entered against the debtor there are various methods of physically recovering the money and those are enforcement methods. Some examples include: instructing bailiffs, charging orders, attachment of earnings, Third Party Debt Orders.
One of the three major credit reporting agencies.
Fixed Assets
Tangible and intangible assets with a relatively long life, acquired to produce goods or services and not intended for resale. Includes financial assets such as trade investments.
Fixed Charge
A charge over a specific asset or type of asset.
Floating Charge
A charge created by a company over all company assets for the time being. The lender has no immediate right over the assets but upon crystallisation of the charge he or she can enforce against any or all of the assets covered by the charge.
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Accounting ratio of money borrowed compared with unencumbered capital. A company is said to be highly geared if a high proportion of their working capital is borrowed rather than invested.
Grace Period
The period allowed to avoid any finance charges by paying off the balance in full before the due date.
 Good Will
Goodwill only features in a company’s balance sheet after it has made an acquisition. It represents the excess of the purchase price over the net worth of the acquisition and is depreciated on the balance sheet over a five-year period. 
A written promise by one person to carry out the contractual commitments of another in the event of default. 
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Home Equity Loan
A loan based on the difference of the amount you own on your home, and the home's current market value.
Holding Company
A company formed for the purpose of exercising financial control over a number of operating companies by buying up all or the majority of their shares. A company has a controlling interest in another when it has acquired over 50% of its issued shares which have voting rights. It also has control over the composition of the board of directors of the subsidiary company.
An inability to pay debts as they fall due, or where a debtor’s total assets are exceeded by his or her liabilities. The law in this area is regulated by the Insolvency Act 1986. To be declared insolvent, debts due to a creditor or creditors should be in excess of £750.
A promise to compensate another for a wrongdoing, expense or loss incurred. To be distinguished from a guarantee which relates to the obligations of another and may not be a primary obligation.
The cost of borrowing or lending money, usually a percentage of the amount borrowed or loaned.
Interest Expenses
Any interest charges incurred, normally shown as a net figure after deduction of any interest received.
Intangible assets
 Elements where 'value' is intangible such as: patents, trademarks and goodwill.
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The official court decision of an action or suit. This public record may be listed on your credit report in matters of money and debts owed.
Joint Venture
A partnership set up between two or more companies, usually joining specific areas of their activities together to enhance  capabilities and competitiveness or to undertake a specific project.
Joint Stock
A company quoted on the Stock Exchange and whose shares are owned by members of the public.
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A written document containing the conditions under which the possession and use of real and/or personal property are given by the owner to another for a stated period and for a stated consideration.
The winding up of a company, usually by reason of an inability to pay its debts, regulated by the Insolvency Act 1986. The realisation of the company’s assets and the distribution of any proceeds to its creditors.
Insolvency practitioner appointed to wind up and settle affairs of a company being wound-up.
Excess of liquid assets over liquid liabilities.
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A loan agreement or claim against property given by the buyer to the lender as security for money borrowed.
Minority Interest
Claim on a company’s assets from minority shareholder/s, can include proposed dividends as yet paid or claimed. 
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Net income / net loss Profit (or loss) after tax less extraordinary items.
Nominal Capital The amount of money that can be put into a Limited or Unlimited company in the form of shares.
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Profit (loss)
Profit is the excess of income over expenses. Loss is the excess of expenses over income.
Personal Line of Credit
The maximum amount you can owe at any time, based on your income, debt and your credit history.
Personal Loan
A loan based on your income, debt and credit history.
The outstanding balance of a loan, exclusive of interest and other charges.
Public Record
Information obtained by the Credit Reporting Agency from court records , such as liens, bankruptcy filings and judgments. Public records are open to any person who requests to see them.
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 Quick Ratio
The short-term ability of a business to meet obligations. Calculated as current assets less stocks and work in progress, divided by current liabilities (also known as Acid Test Ratio - see A above)
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Forced, or voluntary surrender of merchandise as a result of the customer's failure to pay as promised. There are several types and descriptions of repossession actions.
Revolving Account
An account which requires at least a specified minimum payment each month plus a service charge on the balance. As the balance declines, the amount of the service charge, or interest, also declines.
 Red Lining
Declining an applicant for credit on the grounds that he/she lives at an address which is deemed unsatisfactory. This practice is outlawed by the Office of Fair Trade.
Registered Office
Company address at which all documents must be served.  This address is recorded at Companies House.
Reserves The value of net assets over and above the issued capital.
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Secured Credit Card
A credit card secured by savings account that has been established in advance by the borrower. The amount in the account usually determines the limit on the credit card. These accounts present no real risk factor for creditors and are usually much easier to obtain.
Collateral provided by a debtor to support his or her promise to pay. A creditor may require certain rights over valuable property to lend or supply. Security is used to satisfy a creditor in the event of default.
Set-Off A defence tactic.  A debtor acknowledges claimant’s demand but pleads his own claim in order to extinguish the claimant’s demands either in full or in part.
Smart Card
An electronic prepaid cash card, usually sold at banks and are exchanged at face value.
Technically Insolvent
Company has deficit shareholder funds but has positive working capital or long-term borrowings allowing it to continue trading.
Third Party Debt Order
Legal proceeding to recover money owed to the debtor by a third party.
Trade Creditor Accruals Amounts outstanding for goods or services received, whether invoiced or not.
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Unsecured Creditor Creditor with no security for the debt and therefore ranks with other unsecured creditors on equal basis.  Not given any preference in the event of a liquidation or bankruptcy.
Undischarged Bankrupt Person not granted formal permission to resume business dealings. Undischarged bankrupt people cannot seek credit over the sum of £50 without disclosing the 'bankrupt' position to the potential creditor.  Cannot become a director of a company or engage in business under another name.
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Winding Up Order Official court order that a company be wound-up and liquidator appointed.
Winding Up Petition A petition presented to Court if a person or company thinks that a company should be wound-up and be entered into compulsory liquidation.
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