Chapter 13 Terms and Definitions

admin, 08 June 2008,
Categories: Bankruptcy
Tags: Chapter 13 Bankruptcy

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A correct understanding of bankruptcy terms and their definitions is mandatory for making knowledgeable decisions regarding debt and bankruptcy. Following is a list of common terms in easy to understand language.

Asset: Anything that is owned by an individual. They can be liquid (cash) or capital (investment) assets

Adversary proceeding: A lawsuit related to a bankruptcy case that starts with filing a complaint with the bankruptcy court.

Auctions: A public sale of merchandise or property wherein the sale price is determined by bidding.

Automatic stay: A legal action that stops all collection activity; i.e. foreclosure, garnishments, and lawsuits, the moment a bankruptcy petition is filed.

Bankruptcy: A legal process for dealing with debt by either individuals or businesses

Bankruptcy Code: Another name for the Chapter 11 of the bankruptcy law

Bankruptcy Court: Is a part of the district court where bankruptcy judges serve

Bankruptcy estate: Includes all property that a debtor has a legal or equitable interest in at the time of bankruptcy

Bankruptcy Judge: The court official with decision-making power over federal bankruptcy cases

Chapter 13 bankruptcy: A plan whereby, an individual with regular income pays off debts over time and keeps their property.

Claim: An assertion of a right to payment made by a creditor

Complaint: The initial document in a lawsuit notifying the court and defendant of the reasons for an award of money or relief against the defendant if desired by the plaintiff

Confirmation: Approval of reorganization plan

Consumer bankruptcy: Bankruptcy to reduce or eliminate primarily consumer debts

Consumer Debts: Debts relating to personal needs, not business related debts

Contingent claim: A case where the debtor is a cosigner on another person’s loan that has not been paid

Credit Report: A file where your payment history is maintained. In the case of bankruptcy it is allowed to be on your report for 7-10 years.

Creditor: A person or business that is owed or claims to be owed money

Debtor: A person that has filed for bankruptcy

Defendant: The person or entity that a lawsuit is filed against

Discharge: Action prohibiting creditors from communicating with the debtor and from taking any action to collect the debt. It removes personal liability for discharged debts.

Dischargeable Debt: A debt that personal liability can be legally eliminated under bankruptcy code

Equity: The value of a debtor’s property minus all debts against it

Executory contract or lease: A contract or lease that the debtor may or may not choose to assume in which both parties have obligations that remain

Exempt: Any property that creditors may be prevented from recovering

Exempt property: Property that remains free from creditor claims that do not have liens

Exemption: Property that the law allows a debtor to keep from creditors

Face sheet filing: Bankruptcy case filed that is incomplete or without schedules usually done to delay eviction or foreclosure

Family farmer: A farming operation, individual, corporation or partnership that meets debt limits and criteria for filing under Chapter 12

Fraudulent transfer: A transfer of property for which the debtor receives less than property value with intent to defraud

Garnishee: A court order that allows a lender to have monies removed directly from a borrower’s paycheck.

Lien: A charge placed on a specific property to secure payment or performance of an obligation

Liquidation: A sale of property where proceeds go to creditors

Non- Chapter 13 dischargeable debt: Debts that cannot be eliminated through bankruptcy

Petition: An official request for protection under the federal bankruptcy laws

Plan: A description of how a debtor will pay debts over a fixed period of time

Plaintiff: A person or entity that files a complaint with the court

Secured Debt: Debt that is backed by a tangible object that the creditor has the right to secure upon non-payment of the debt

Schedules: Lists of assets, liabilities and other financial information that must be filled with the petition

Trustee: A corporation or individual assigned by the court to represent the interests of the bankruptcy estate and debtor’s creditors in all Chapter 7, 12 and 13 cases. They oversee the repayment plan and distribution of payments.

341 meeting: A meeting where creditors, a trustee, and examiner question the debtor about his financial affairs while he or she is under oath

Next Step: Chapter 13 Exemptions

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