Glossary

Creditors

The person or company to whom you owe money

Debtor

An individual who owes money to one of more creditors

Insolvent

The most common meaning of ‘insolvent' is being unable to pay your debts as and when they are due to be paid. Alternatively, if your assets are worth less than your debts, this also means you are insolvent.

Dividend

When creditors are paid they are all treated equally. The dividend is the share of the total funds available that they receive.

Disposable income

The amount of money left and the end of the month once all essential expenditure has been deducted from your net take home pay and before any unsecured debt repayments have been made.

Statutory Demand

A formal notice requiring payment of a debt exceeding £750 within 21 days. In default of this demand, bankruptcy proceedings may be commenced without further notice.