An acceleration clause is a loan provision giving the lender the right to declare the entire amount immediately due and payable upon the violation of a specific provision of the loan, such as failure to make payments on time.
An accountant's lien is the right to retain possession of a client's goods or property until the client fulfills their financial obligations to the accountant.
Attachment is a legal procedure that allows a creditor who has obtained a court judgment to secure payment from a debtor. This can include freezing money or property owed to the debtor by a third party and redirecting it to the creditor.
Bad debt refers to an amount owed by a debtor that is unlikely to be recovered, such as when a company goes into liquidation. The full amount should be written off to the profit and loss account of the relevant period or to a provision for bad debts upon identification, in line with accounting prudence principles.
Bad debts recovered are those debts that were previously classified as bad and written off but later recovered either in part or in full. These recovered debts should be recorded back into the profit and loss account of the period, or relevant provisions.
A legal term referring to a personal right to possess property or claim debts, which can only be realized by taking legal action.
A creditor is an entity that is owed money, either for goods or services provided or as a result of a loan. Creditors have a legal right to claim the owed amount from the debtor.
An organization that specializes in collecting the outstanding debts of its clients, typically charging a commission for their recovery services.
The direct write-off method is a process where bad debts are written off as they occur instead of creating a provision for them. While this method is unacceptable for financial reporting purposes under GAAP, it is the only method allowed for tax purposes in the United States.
DUN is a term used to refer to the practice of requesting payment for past due amounts. It often involves reminding or urging the debtor to pay back what is owed.
An overview of the legal process where a lender seeks to recover the balance of a loan from a borrower who has stopped making payments by forcing the sale of the property used as collateral for the loan.
The recovery rate is a measurement in finance that represents the extent to which principal and accrued interest of defaulted debt are reclaimed by a creditor. It is a crucial metric for risk assessment and investment decision-making in the realm of distressed securities and defaulted bonds.
A statutory demand is a formal request issued by a creditor to a debtor demanding the repayment of an outstanding debt. It serves as evidence of a debtor's inability to pay if unmet, and can support a compulsory liquidation petition under the Insolvency Act 1986.
