What happens when repayments are missed, from hardship arrangements to insolvency.
14 terms in this topic
An acceleration clause is a term in a loan contract that lets the lender demand the whole outstanding balance immediately if the borrower breaches the agreement.
Read definitionAdministration is a formal insolvency procedure where an independent administrator takes temporary control of a company to rescue it or get creditors a better result than immediate liquidation.
Read definitionArrears are overdue repayments on a loan or credit account: the borrower has missed instalments, which the lender tracks by days past due and which can lead to a default.
Read definitionA bad debt is an amount owed to your business, usually an unpaid invoice already counted as income, that you cannot recover despite reasonable efforts and so write off.
Read definitionBankruptcy is a legal status for an individual who cannot pay their debts, under which a trustee takes control of their affairs and deals with creditors on their behalf.
Read definitionCollections is the recovery process a lender, creditor or business runs when payments fall overdue: reminders, calls, payment plans and hardship offers, then referral to agencies or legal action.
Read definitionDebt adjusting is any arrangement that changes what a debtor owes or when they pay it, from an informal hardship variation through to a debt agreement or bankruptcy.
Read definitionDebt counselling is a free, confidential service, known in Australia as financial counselling, that helps people in financial difficulty build a realistic budget and negotiate hardship arrangements with creditors.
Read definitionA default is a borrower's failure to meet the terms of a credit contract, usually by missing repayments, which lets the lender demand the balance and enforce its security.
Read definitionFinancial hardship is when a change in your circumstances, such as job loss or illness, means you cannot meet your loan, credit or bill repayments on time.
Read definitionLiquidation is the process of winding up a company: a liquidator takes control, sells its assets, pays creditors in a set order of priority and the company is deregistered.
Read definitionA moratorium is a temporary pause on repayments or on creditor enforcement, agreed with a lender or imposed by law, that gives a borrower or an insolvent company breathing space.
Read definitionA non-performing loan (NPL) is a loan where the borrower is not meeting payments and the lender judges full repayment doubtful, commonly once payments are 90 days past due.
Read definitionA statutory demand is a formal written demand for a company debt under the Corporations Act that, if ignored, creates a presumption of insolvency and can lead to liquidation.
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