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Definition Of Bankruptcy Terms
Thinking About Filing for Bankruptcy? Learn the Language.
CBG Law Group has been helping people get a fresh start from their debts for many years. We know that everyone comes to us with a unique set of circumstances and every case is different. At our firm, you will always be treated with respect and courtesy. We have always believed there is one important thing that everyone should know about bankruptcy: It is a legal process that has been made available because every American deserves a second chance.
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If you are thinking of filing for bankruptcy, it is important to understand that you will be entering into a legal process. That means there will be legal terms that you will hear from your lawyer that may be unfamiliar to you. We invite you to learn more about some of the legal terms and definitions you may hear as your case progresses.Contact us to schedule a free consultation with attorney Darrel Carter about your specific circumstances.
Common Bankruptcy Terms
Assets: Any form of property owned by the filer, including financial accounts, real estate, personal property and accounts receivable or money owed.
Automatic stay: A legal injunction that stops all further legal and collections actions against the bankruptcy petitioner
Bankruptcy Court: The judge, administrator and trustee assigned to preside over your bankruptcy case in your specific jurisdiction
Chapter 7 bankruptcy: A form of bankruptcy petition seeking to liquidate certain types of debts
Chapter 11 bankruptcy: A form of bankruptcy generally filed by businesses, although sometimes filed by an individual, seeking protection from creditors while you reorganize your business or personal operations and restructure your debt into an affordable payoff plan
Chapter 13 bankruptcy: A form of bankruptcy seeking to restructure all personal debt into an approved monthly repayment plan, supervised by the courts
Creditor: The party to whom you owe money
Debtor: Any person owing money to a creditor
Discharge: Release of a debtor from specific debt obligations. At the conclusion of a successful Chapter 7, Chapter 11, or Chapter 13 bankruptcy filing, your debts will be discharged.
Dismissal: Not to be confused with discharge. A dismissal means your case has been dropped by the bankruptcy court. It does not mean you have been dismissed from your debt obligations.
Equity: The value of your financial interests in an asset. If you have paid half the amount owed on a $100,000 real estate loan, you may have $50,000 equity in the property.
Exempt property: The bankruptcy code allows debtors to declare certain property as bankruptcy exemptions. If the exemption is allowed, it will be protected from your creditors and the bankruptcy estate.
Judgment: The court grants the right of a creditor to seize assets to recover a debt owed. The creditor may apply collections remedies such as liens against property or garnishment of wages or bank accounts.
Means test: A way to determine whether you qualify for bankruptcy and the chapter of bankruptcy you qualify for using national and local standards for monthly expenses.
Net income: The amount of your take-home pay, following taxes and other legal deductions.
Non-dischargeable debt: Any debt which cannot be discharged in bankruptcy. This typically includes student loans and other government-backed loans.
Party of interest: Basically, your creditors who have something to lose in your bankruptcy case. Parties of interest are entitled to representation to argue their case for repayment.
Pre-petition: Legal actions that occur prior to filing the formal bankruptcy petition
Post-petition: Legal actions occurring after the petition has formally entered the bankruptcy process
Schedules: A detailed list of your assets and liabilities as well as your monthly budget
Secured debt: A loan taken out on property or assets, in which the creditor maintains the right to repossess the property in the event of default. A car loan is a good example of a secured debt.
Unsecured debt: Generally, credit cards are unsecured loans, in which the credit card company loans money for general use, with no process for repossessing a specific piece of property
Statement of financial affairs: A questionnaire filled out by the debtor at the beginning of the bankruptcy process. The statement of financial affairs is typically part of the pre-petition process.
Trustee: A representative of the bankruptcy estate, assigned to exercise legal authority and oversee the possible disposal of the property which is part of the bankruptcy estate.
To learn more about how we can help you get a fresh start through bankruptcy,contact us today. From our offices in Bellevue, we represent individuals, families and business owners throughout the Bellevue region and western Washington.