341
Meeting: Common name of the creditors meeting that takes place pursuant to §341
of the Bankruptcy Code.
Automatic
stay: a type of injunction that stops
all collection activities, lawsuits, foreclosures, garnishments; this
injunction occurs at the moments the bankruptcy petition is filed.
Bankruptcy
Estate: All interests of the debtor in property existing at the time the
bankruptcy petition is filed. Property
interests include tangible and intangible items and is not limited to items
currently in possession or currently titled to debtor, it includes all
equitable and legal interests, unless said property is exempted by the debtor
pursuant to 11 USC §523.
Chapter
7: Most common type of bankruptcy
available for business and for individuals.
In most cases individuals who file this chapter can keep all of their
assets and are not required to pay any of their debts, it is for this reason it
is sometimes also referred to as “Total bankruptcy”
Chapter
9: A form of bankruptcy providing for the reorganization of municipalities such
as cities, villages, school districts, taxing districts and counties.
Chapter
11: A reorganization proceeding in which
the debtor may continue in business or in possession of its property, as a
debtor in possession. A confirmed Chapter 11 plan sets the terms and the manner
in which the claims of creditors will be paid.
Chapter
12: A reorganization plan for family farmers whose debts fall within prescribed
limits.
Chapter
13: Is a type of bankruptcy only available to real people (businesses cannot
file this type) It is a repayment plan bankruptcy that last between 3 years and
5 years, with the debtor typically paying monthly or weekly payments. At the conclusion of the 3-5 year period any
remaining debt can be discharged.
Chapter
15: The chapter in the Bankruptcy Code dealing with cross-border insolvency
issues
Confirmation:
The bankruptcy Judge’s official approval of a plan or reorganization in
chapters 11, 12, or 13.
Conversion:
The process by which a case is moved from one chapter of the code to another
(i.e. by which a Chapter 7 is converted to a Chapter 13)
Current
Monthly Income: The average monthly income received by the debtor over the six
calendar months before commencement of the bankruptcy case, including regular
contributions to household expenses from nondebtors and income from the
debtor's spouse if the petition is a joint petition, but not including social
security income and certain other payments made because the debtor is the
victim of certain crimes. 11 U.S.C. § 101(10A).
Debtor:
The person or entity who has filed for relief under the Bankruptcy Code.
Discharge:
The process by which the debtor’s legal obligation to pay certain debts is
removed. The discharge comes as an order
from the court eliminating the legal obligation to pay the discharged debts.
Dismissal:
The termination of a bankruptcy case without discharge, can result from fraud,
abuse, or other violations of the code.
The effect of dismissal is to eliminate the relief of bankruptcy
following dismissal creditors are restored to their previous position regarding
the debtor as if no bankruptcy were filed.
Equity:
Remaining value in debtor’s property after deducting the value of the allowable
secured interests.
Exemptions:
Lists of the kinds and values of certain types of property that are allowed to
be excluded by the debtor from potential sale by the trustee. Exempt property is kept by the debtor free of
the claims of trustee.
Insider:
Any relative or partner of the debtor, or in the case of a debtor corporation
any person in control of the corporation
Joint
Petition: Bankruptcy petition filed by a husband and wife debtor.
Lien:
An interest in property whether real or personal that secures a debt attached
to that property. Liens create a right
to take and hold or sell the property of the debtor for failure to pay or
comply with the underlying obligation.
Liquidation: The sale of the non-exempt portion of the
debtors property for the benefit of the debtors creditors.
Means
Test: The means test was created as part of the Bankruptcy Reform and
Protection Act of 2005.It is a test to determine the eligibility of the
individual debtor (and debtor’s joint filing spouse).It is an income and and
expense based test that is used to prevent abuse of Chapter 7 of the Bankruptcy
Code. Abuse is presumed if the debtor's aggregate current monthly income (see
definition above) over 5 years, net of certain statutorily allowed expenses is
more than (i) $10,950, or (ii) 25% of the debtor's non-priority unsecured debt,
as long as that amount is at least $6,575. The debtor may rebut a presumption
of abuse only by a showing of special circumstances that justify additional
expenses or adjustments of current monthly income.
Nondischargeable
Debt: Is a debt that cannot be eliminated in bankruptcy. These types of debts remain in force
following the successful completion of a bankruptcy by the debtor.
Personal
Property: All assets held by debtor that
is not a form of real estate, includes cars, stocks and bonds and other non-real
holdings.
Preference: A debt payment made within 90 days of the
date of filing to a non-insider or up to one year before filing if it was to an
insider.
Proof
of claim: The form filed with the court establishing the creditor's claim
against the debtor.
Property
of the estate: All non exempt property
is property of the bankruptcy estate.
This property can be sold for the benefit of the creditors.
Reaffirmation:
The process by which a debtor agrees to remain liable for an otherwise
dischargeable debt. This can be used to
allow the debtor to keep a secured asset such as a house or car.
Schedules:
Detailed lists filed by the debtor along with the filing of the petition
showing the debtor's assets, liabilities, and other financial information.
Statement
of Financial Affairs: A series of questions that the debtor is required to
answer in writing concerning their income history, their prior involvement in
lawsuits, and any potentially preferential transfers of property that they have
made.
Trustee:
Court appointed official charged with overseeing the bankruptcy case and
protecting the interests of the creditors.
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