Bankruptcy Terms

Automatic Stay: An injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.

Bankruptcy Estate: The legal and equitable interests of the debtor in property at the time of the bankruptcy filing.

Claim: A right to payment.

Confirmation: Approval of a plan of reorganization by a bankruptcy judge.

Consumer Debt: The debt incurred by an individual primarily for a personal, family, or household purpose.

Creditor: The party who has a claim against the debtor.

Debt: An obligation to pay a claim.

Debtor: The person who has filed a petition for bankruptcy.

Dischargeable Debt: A debt for which the Bankruptcy Code allows the debtor’s personal liability to be eliminated.

Equity: The value of a debtor’s interest in property that remains after liens and other creditors’ interests are considered.

Exemption: Property that the Bankruptcy Code or applicable state law permits a debtor to keep from creditors.

Joint Petition: One bankruptcy petition filed by a husband and wife together.

Liquidated Claim: A Creditor’s claim for a fixed amount of money.

No-Asset Case: A Chapter 7 case where there are no assets available to satisfy any portion of the creditors’ unsecured claims.

Non-dischargeable Debt: A debt that cannot be wiped out in bankruptcy.

Objection to Discharge: A trustee’s or creditor’s objection to the debtor’s being released from personal liability for certain dischargeable debts.

Priority: The Bankruptcy Code’s statutory ranking of unsecured claims that determines the order in which unsecured claims will be paid if there is not enough money to pay all unsecured claims in full.

Priority Claim: An unsecured claim that is entitled to be paid ahead of other unsecured claims that are not entitled to priority status.

Secured Creditor: An individual or business holding a claim against the debtor that is secured by a lien on property of the estate or that is subject to a right of setoff.

Statement of Intention: A declaration made by a Chapter 7 debtor concerning plans for dealing with consumer debts that are secured by property of the estate.

341 Meeting: A meeting of creditors at which the debtor is questioned by creditors, a trustee, examiner, or the United States trustee about his/her financial affairs.

Undersecured Claim: A debt secured by property that is worth less than the amount of the debt.

Unliquidated Claim: A claim for which a specific value has not been determined.

Unscheduled Debt: A debt that should have been listed by a debtor in the documents filed with the court but was not.

Unsecured Claim: A claim or debt for which a creditor holds no special assurance of payment.

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