There are many legal terms used in bankruptcy law.? Becoming familiar with the terms and definitions can be helpful when trying to understand how the whole bankruptcy process works and how it relates to your unique situation.? Provided below is a list of common terms and definitions.
341 Meeting of Creditors ? This will be the court date you will have to attend to when you file bankruptcy.
Adversary Proceeding ? A court hearing within a bankruptcy case. Example: Adversary Hearing to strip a 2nd mortgage
Arrearage ? The amount of money you are behind in a secured debt such as a car or house.
Assets ? Items of value owed by a person or entity such as real estate, vehicles, and jewelry.
Automatic Stay ? Protection you receive by the Federal government when filing bankruptcy that will automatically stop a wage garnishment, foreclosure, sheriff sale, vehicle repossession, and utility disconnection. The automatic stay will prevent creditors from beginning or continuing a lawsuit against you. The automatic stay will essentially stop any and all creditor collection efforts against you.
Avoidance ? The ability to remove a lien.
Bankruptcy Code ? Laws that govern the bankruptcy process.
Bankruptcy Estate ? The debtor?s property that is subject to the authority of the bankruptcy court.
Bankruptcy Petition ? The document filed with the court when filing bankruptcy.
Chapter 7 ? What most people think of when they think about bankruptcy where most of your debts are eliminated right away such as credit cards, personal loans, medical bills, utility bills, items sent to third-party collections, debt owed from a foreclosed home, debt owed from repossessed vehicles, evictions, reinstatement fees, and attorney fees.
Chapter 13 ? The type of bankruptcy that most people think of as a debt consolidation through the Federal government.? Filing a Chapter 13 bankruptcy could allow you to pay pennies on the dollar on your debts with a monthly payment you can afford.? Filing a Chapter 13 bankruptcy can also help you save a house from foreclosure or a car from becoming repossessed if you are behind in your payments.
Claim ? A creditor?s assertion of a right to payment from the debtor or the debtor?s property.
Confirmation ? Bankruptcy court?s final approval for a plan of reorganization in a Chapter 13 bankruptcy.
Credit Counseling ? Class you have to take in order to file a Chapter 7 or Chapter 13 bankruptcy.? There are many companies approved through the court.? The class can be taken online, over the phone, or in person.
Debt ? Bills that you owe.
Debtor ? A person who has filed bankruptcy.
Debtor Education ? Credit counseling class you have to take in order to file a Chapter 7 or Chapter 13 bankruptcy.
Deficiency Judgment ? Bill you get stuck with after your house is foreclosed on or vehicle repossessed.
Defendant ? The person the lawsuit is filed against.
Discharge ? What you receive after you file bankruptcy stating that the bankruptcy is complete.
Dischargeable Debt ? Debts eliminated by filing bankruptcy.
Dismissal ? The termination of a bankruptcy case.
Disposable Income ? Income left over each month after you pay all your necessary monthly expenses.
Domestic Support Obligation ? Debts owed for child support or spousal support.
Equity ? The value of a debtor?s interest in property.? It is the difference between the fair market value and what you owe.? Example: House worth $100,000 and you owe $80,000.? You have $20,000 equity.
Foreclosure ? Legal process in which the 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 foreclosure happens when you are behind in your mortgage payments.
Individual Bankruptcy Petition ? When you file bankruptcy by yourself.
Joint Bankruptcy Petition ? When husband and wife file a bankruptcy together.?
Judgment- The court?s decision on a legal matter. If there is a judgment rendered against you from a lawsuit you could possibly be faced with a wage garnishment, seized bank accounts, or liens attached to property.
Lien ? The right to take and hold or sell the property of a debtor as security or payment for a debt or duty.
Lien Stripping ? Lien against property is removed when the value of the property is less than the amount owed on senior lien.
Liquidation ? A sale of a debtor?s property with the proceeds to be used for the benefit of creditors.
Means Test ? In 2005, the U.S. government acted to crack down on abuses of the bankruptcy system by passing the means test. The new rule specifically addresses people who may have adequate income to pay off their debts. The rule only applies to Chapter 7 bankruptcy.? In general, means test calculates your income and your debts, and provides a certain ratio of debt to income at which you are deemed to have ?passed?.
Mortgage ? Loan on real estate.
Motion For Relief From Stay ? A request by a creditor to allow the creditor to take action against the debtor or the debtor?s property that would otherwise be prohibited by the automatic stay. Example: Request permission from the court to foreclose on real estate, repossess vehicle, or proceed with eviction.
Net Income ? What most people call ?take home? pay.? It is the amount of money you receive after the various deductions of taxes.
No-Asset Case ? A chapter 7 case when there are no assets available to satisfy any portion of the creditors? unsecured claims.
Nondischargeable Debt ? Debts that are not eliminated by filing bankruptcy. Example: student loans, child support, and spousal support.
Objection to Dischargeability ? A trustee?s or creditor?s objection to the debtor from becoming released from personal liability for certain debts that are typically discharged by filing bankruptcy. Common reasons include some type of fraud.
Plan ? A debtor?s detailed description of how the debtor proposes to pay creditors? claims over a fixed period of time usually between a time period of 3 ? 5 years for a Chapter 13 bankruptcy.
Plaintiff ? A person or business that files a formal complaint with the court seeking relief.
Post-Petition Debt ? Debt incurred after the bankruptcy has been filed.
Proof of Claim ? A written statement and verifying documentation filed by a creditor that describes the reason the debtor owes the creditor money. The creditor would file a proof of claim with the bankruptcy court in order to get paid if there is money to be disbursed to the creditors.
Reaffirmation Agreement ? You would want to sign a reaffirmation agreement if you want to keep something you are still paying on.? Reaffirmation agreements are signed and filed with the court in Chapter 7 cases when a debtor wants to retain and keep paying on a car or house.
Repossession ? Vehicle being taken from you because you are behind in vehicle payments.
Schedules ? Detailed lists showing the debtor?s assets, liabilities, and other financial information.
Secured Creditor ? An example of a secured creditor would be a creditor holding a lien for a car, house, or other tangible asset that you owe money on.
Secured Debt -?A debt that you owe that is backed by collateral that a creditor can recover if you default.
Sheriff Sale ? End result of a foreclosure when your house is sold to pay off a portion of your mortgage. ?The difference between what you owe and what the house sells for is the bill you get stuck with.? The bill you get stuck with is called a mortgage loan deficiency judgment.
U.S. Bankruptcy Trustee ? Responsible for supervising the administration of bankruptcy cases.
Unsecured Debt ? Debt that is not backed by collateral.? Examples: credit cards and medical bills
Utility Disconnection ? Utilities being shut off because you are behind in your utility bill.
Wage Garnishment ? Money that is taken out of your payroll before your paycheck is issued or direct deposited in your bank account.? This can happen to you after a judgment is rendered against you from a lawsuit.
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There are many other terms used in bankruptcy law.? An experienced Columbus Ohio Bankruptcy Attorney will be able to answer any legal questions you have and can take the necessary legal action when time is of the essence.
The Law Office of M. Sean Cydrus Can Help!
The friendly Law Office of M. Sean Cydrus can help you craft a plan to rebuild your financial future. We understand the stress of financial worry. We use a personal approach to solving your financial challenges and are here to help you through this difficult time. We pride ourselves on the ability to provide our legal expertise with compassion and understanding. We ensure that your rights are protected and that someone is looking out for your best interest. We can meet with you at our conveniently located offices in Columbus and Chillicothe. Call today for a free consultation. Help is one phone call away!
Source: http://www.ohiodebtsolutions.com/common-bankruptcy-terms-and-definitions/
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