A bad credit rating is any loan or credit facility that has been unpaid for a period of time determined by the lender, missed and late payments do affect your credit rating. It is also called Poor Credit or adverse credit history.

If you miss a payment, make a late payment or fail to pay the full sum owed on a loan or credit agreement you will fall into arrears (this is breaking your contractual payments), which could lead to a CCJ - County Court Judgement .

Debt is the amount of money you owe to lenders, normally in the form of Loans, Credit Cards etc

This could be a single loan that that you use to pay off the majority of your outstanding unsecured debts. You would usually pay a lower monthly amount over a longer period and if you have a poor credit rating secured loans may be the only option for a consolidation loan.

A informal arrangement to repay debt, with one single monthly payment. This is designed to help individuals to manage their debts.

A debtor is someone who owes money to a financial institution or company.

A deed of arrangement is what an individual (not a company) uses to clear creditor debt bar formal bankruptcy. This method is no longer very popular, as Individual Voluntary Arrangements have surged in popularity

Creditors issue default notices to debtors to inform them that the company will start with legal proceedings to recover their money, this normally happens after 3 months missed and late payments.

Early repayment charges, also sometimes known as a settlement charge, are applicable if a loan or a mortgage is repaid early.

A judgement is a ruling given within a court of law that will result in an obligation by one party.

Individuals who want to arrange a voluntary agreement with their creditors should apply to the court for an interim order. If the court grants an order, it will protect against bankruptcy and any other legal proceedings while in force.