Glossary of Bankruptcy Terms
Assets are every form of property that the debtor owns.
An injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.
The official form filed by the debtor (in a voluntary case) or by creditors (in an involuntary case) by which opens a bankruptcy case.
Collateral is a borrower’s specific property offered to a lender to secure repayment of a loan.
A person who purchases or borrows money for personal, family or household use.
A person or firm that extends credit.
A record of an individual or company’s past history of borrowing and repayment, including information about late payments and bankruptcy.
A person who is in debt or under financial obligation to another.
The legal elimination of debt through a bankruptcy case.
The value of a debtor’s interest in property that remains after liens and other creditors’ interests are considered. (Example: If a house valued at $100,000 is subject to a $80,000 mortgage, there is $20,000 of equity).
Certain property owned by an individual debtor that the Bankruptcy Code or applicable state law permits the debtor to keep from unsecured creditors.
A specific legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.
A court-approved mechanism under which two or more cases can be administered together. (Assuming no conflicts of interest, these separate businesses or individuals can pool their resources, hire the same professionals, etc.)
One bankruptcy petition filed by a husband and wife together.
The sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.
A written notice that a lawsuit has been filed which concerns the title to real property or some interest in that real property.
A series of financial tests to see if and/or how the consumer qualifies for bankruptcy.
Meeting of Creditors
Whenever a debtor files a petition for bankruptcy protection, he must attend the first meeting of creditors, usually scheduled 30 days after the filing (also called the 341 meeting).
A debt that cannot be eliminated in bankruptcy.
Repossession is generally used to refer to taking back an object that was either used as collateral or rented or leased in a transaction.
The party having right of ownership of the property in question takes the property back without invoking court proceedings.
A written notification to a party named in a lawsuit directing the party to appear and defend or answer before the issuing court prior to a specified time.
Wage garnishment is the process of deducting money from an employee’s monetary compensation, sometimes as a result of a court order.