Important Definitions

We understand that dealing with debt can be worrying or overwhelming.

These explanations are written to be clear, calm, and supportive. You can take your time, ask questions, or ask for extra help at any stage.

Affordable Payment

An affordable payment is a monthly amount that allows you to repay debts while still covering essential living costs.
Your wellbeing and ability to maintain the payment are always considered.

Annual Statement

Creditors are required by law to send statements for many credit agreements.
These statements show the balance on the account and payments made.
You may still receive these even while on a Debt Management Plan.

Arrears

Arrears means payments that have been missed or paid below the original contractual amount.
Because Debt Management Plans often reduce the monthly payment to something affordable, creditors may still record arrears on the account.

Cleared Funds

This means money you have paid to us that we have safely received and can use. This may be money sent by bank transfer, cash, or a cheque that has cleared.

Client Account

Your money is kept in a separate, protected bank account called a client account.
This account is only used to hold clients’ money and is never used for our own business costs.

Client Authority to Act

This is a form you sign to give us permission to contact your creditors and deal with them on your behalf.

This can help reduce stress and stop you from having to manage difficult conversations on your own.

Creditors

These are the companies or people you owe money to, such as banks, lenders, or credit card providers.

Debt Management Agreement

This is the agreement between you and us.
It explains how we will support you in managing and repaying your debts in a way that is fair, clear, and affordable.

Debt Purchaser

A debt purchaser is a company that buys debts from lenders.
They then become the new creditor for the account.

Default

A default happens when a creditor believes an account has fallen seriously behind with payments.
If this happens, the creditor may record a default on your credit file and may close the account.
Defaults are common when someone enters a Debt Management Plan and do not mean the plan has failed.

Default Notice

A Default Notice is a formal letter a creditor may send before they close an account or take further action.
It gives you time to bring the account up to date before the creditor takes the next step.
Receiving a Default Notice does not mean there is a problem with your Debt Management Plan.

Disposable Income

This is the money left over after essential living costs have been paid.
This is the amount that may be available to repay your debts.

Financial Statement

This is a simple overview of your finances. It includes:

• The money you receive
• The money you spend
• Any savings or belongings you have

This helps us make sure any plan we agree with you is suitable and realistic.

Interest and Charges

Interest is the cost of borrowing money. Charges are extra fees that may be added if payments are missed.
We will ask your creditors to freeze interest and charges when your Debt Management Plan begins, but they are not required to do so.

Monthly Management Cost

This is the monthly fee you pay for our support.
This fee will never be more than 50% of your total monthly payment, and we will explain it clearly before you agree to anything.

Monthly Payment

This is the total amount you pay us each month.
It is agreed with you and should be affordable. This money is used to:

• Pay your creditors
• Pay our management fee

Monthly Repayments

This is the part of your monthly payment that we pass on to your creditors to reduce what you owe.

Notice of Assignment

Sometimes a creditor may sell your debt to another company.
If this happens, you will receive a Notice of Assignment. This simply tells you that a different company now owns the debt.
Your repayment plan can usually continue as normal.

Notice of Sums in Arrears

This is a letter creditors must send if your payments are lower than the original contractual payment.
This notice is required by law and does not mean there is a problem with your Debt Management Plan.

Repayment Plan / Debt Management Plan

This is your personal plan to repay your debts through manageable monthly payments.
We review this plan with you if your situation changes and provide ongoing support.

Services

This means the debt management help and support we provide, as explained in this agreement.

Statement of Affairs

This is the financial information you have given us in your documents. It helps us understand your situation and act in your best interests.

Term

This means how long this agreement lasts — from when it starts until we stop providing services.

Us / We / Our

Debt Support Service Ltd, or another company we may legally transfer this agreement to.
If this happens, your rights and protections remain the same.

Working Day or Business Day

A normal working day in the UK. This does not include weekends or public holidays.

You / Your

You — the person or people named in this agreement who are receiving our support.

Your Rights and Support

• You can ask questions at any time
• You can ask us to slow things down or explain again
• You can tell us if you are feeling unwell, distressed, or under pressure
• If your circumstances change, we will review your plan with you

We are committed to treating you fairly, with understanding and respect, in line with FCA guidance.