Bankruptcy Glossary- Bankruptcy Terms & Terminology - Bay Area Bankruptcy Lawyer

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Please contact our bankruptcy lawyer and attorney at our bankruptcy law office located in San Jose, San Clara County, Alameda County, San Mateo County, and San Francisco County area at 408-912-5983.

341 Meeting: This is the first meeting of creditors required by section 341 of the Bankruptcy Code at which the debtor is questioned under oath by creditors, a bankruptcy trustee or the U.S. trustee about the debtor’s assets and liabilities.

341 Notice: A notice which the bankruptcy clerk gives to the debtor to inform the debtor of his/her obligations under the bankruptcy code and the penalty of not being honest in filing bankruptcy petition.

Abuse: Abuse is the improper use of chapter 7 bankruptcy remedy. This happens because the debtor is trying to show improper income and expense in an attempt not to file chapter 13.

Adversary Proceeding in Bankruptcy: A lawsuit filed in the bankruptcy court to determine the discharge ability of debtor’s personal liability or recover wrongfully transferred assets.

Affidavit: A statement of facts signed under oath before a notary public.

Amendment: An official document which the debtor or his bankruptcy attorney filed to change one or more documents originally filed.

Assets:  Assets are things you own like furniture, house, car, bank accounts, cash, household goods, clothes and other items. They may include exempt assets and non-exempt assets.

Automatic Stay: This is an order or injunction from the bankruptcy court once the bankruptcy petition is filed which automatically stops all collection actions, temporarily stops foreclosures, stops garnishments, stops attachments, stops lawsuits, stops collection calls and letters against you.

Avoidance Powers: Bankruptcy trustee or the debtor in possession is given powers by the bankruptcy code to recover certain transfers of property or assets made prior to the filing of the bankruptcy case.  This gives the bankruptcy trustee the power to recover fraudulent transferred assets and sell them for the benefit of the creditors.

Bankruptcy: It is a legal court procedure for dealing with debt problems of individuals and businesses. This process starts when an individual or business indicates inability to pay debts.

Bankruptcy Administrator: A court appointed official who supervises the administration of bankruptcy cases and estates.

Bankruptcy Code: The United States law that establishes the creation of the bankruptcy courts and procedures.

Bankruptcy Court:  The federal judicial tribunal where cases under the Bankruptcy Code are litigated and adjudicated.

Bankruptcy Estate: The bankruptcy estate includes all properties of the debtor as of the date the bankruptcy case was filed. The trustee will then review all the assets and liabilities to determine whether the filing was done properly after which a determination is made as to which debt is dischargeable.

Bankruptcy Judge: The bankruptcy judge is a judicial officer of the United States district court who makes decision on federal bankruptcy cases.

Bankruptcy Petition Preparer: Someone who assists people to prepare their bankruptcy papers but cannot represent them in court or at trial.

Bankruptcy Petition: These are legal papers filed by the debtor with the bankruptcy court that starts the bankruptcy process for debt liquidation or reorganization. Please contact our bankruptcy lawyer and attorney at our bankruptcy injury law office located in San Jose, San Clara County, Alameda County, San Mateo County, and San Francisco County area at 408-912-5983.

Chapter 7: Chapter 7 bankruptcy also referred by some as liquidation bankruptcy or straight bankruptcy is available to individuals, married couples, partnerships, small business and corporations. It is a means for debtors that have difficulty paying their debts to liquidate the debts and start fresh.

Chapter 7 Trustee: This is the bankruptcy trustee that handles the Chapter 7 case. The trustee’s duty is to conduct a meeting of creditors, review debtors bankruptcy petition with the goal of identifying non-exempt assets that can be sold and distributes any recovery to creditors.

Chapter 9:  This is a reorganization bankruptcy for municipalities including cities, counties, and school districts

Chapter 11: This is reorganization process by the bankruptcy court where the debtor may continue in business or in possession of its property with payment plans to his creditors.

Chapter 12:  This is a reorganization process for family farmers and fishermen to help them retain their business.

Chapter 13: This reorganization or readjustment plan is for individuals who can make some kind of payment to their creditors. The payment arrangement is for 3 to 5 years. 

Chapter 13 Trustee:  In chapter 13 cases, the trustee’s duty includes reviewing the debtors chapter 13 payment plan, approving or rejecting it, receiving payments from the individual who filed bankruptcy, and then distributes it to approved creditors.

Chapter 13 Plan: A debtor written document tendered in court explaining how he or she plans to use his or her disposable income during the bankruptcy payment period usually 3 to 5 years.

Claims:   This is creditor’s rights to repayment of debts against a debtor. The debts may be in the form of secured or non-secured debts.

Complaint:  Complaints are initial document filed by the plaintiff in court that notifies the Defendant of a pending lawsuit.

Confirmation:  The court order by the Judge that makes the terms of the plan for repayment of debts in a Chapter 11, 12 or 13 final and binding. Confirmation is final approval of a debtor's plan of reorganization.

Consumer Bankruptcy: The primary purpose of the debt in consumer bankruptcy is for personal, family and household purposes like medical bills. This primarily includes chapter 7 and chapter 13 bankruptcy.

Consumer Debtor: This is a debtor whose debts are mainly consumer debts like medical bill, furniture, clothes, and food. Business debts are not consumer debts.

Consumer Debts:  These debts are primarily consumer debts. Obligations incurred for personal, family, and household purposes like medical bill, clothes, and furniture.

Contested Matter:  This occurs where there is disputed issue among the parties to a bankruptcy proceeding and motion is filed in court to resolve the matter.

Conversion:  This is where there are changes in bankruptcy chapters like changing from chapter 7 bankruptcy to chapter 13. The bankruptcy judge may originate this change if it is necessary to avoid abuse of the process by a debtor.

Cramdown:  This is where the court confirms in support of a plan of reorganization over the objections of one or more of creditors.  Here, the bankruptcy judge believes it is in the best interest of all parties to reduce a secured creditor's debt to the fair market value of the property like a car, jewelry or motorcycle where the loan amount is higher than the fair market value.

Credit Counseling: It is a requirement for bankruptcy filing that individual debtors must attend a briefing or credit counseling. One must be completed before filing bankruptcy and the other after filing bankruptcy but before bankruptcy discharge. Credit counseling is required for both chapter 7 and chapter 13.

Creditor:  A creditor is a person or organization to which the debtor owes money or some other form of legal obligation. Here, the debts are mainly consumer debts.

Creditor Committee: A committee set up to assist unsecured debtors in reorganization proceeding in chapter 13 bankruptcy.  The committee acts on behalf of all creditors on negotiating a plan of reorganization and other major actions.

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 non-debtors 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: A person who owes money to the creditor and has filed a petition or declaration for relief under the Bankruptcy Code.

Declaration of Homestead: An official form filed to notify the county recorder’s office your right to a homestead exemption.

Defendant: An individual or business against whom a lawsuit is filed and pending by the plaintiff in court.

DISCHARGE: The legal term for wiping out your debt through bankruptcy. A discharge wipes a debtor personal liability for certain debts known as dischargeable debts. It also prevents the creditors owed those debts from taking any action against the debtor to collect the debts.

Dischargeable Debt: This is the type of debtor’s personal liability that can be wiped off and eliminated in bankruptcy.

Debtor in Possession:  The debtor usually remains in possession of its assets and assumes the duties of a trustee in chapter 13 and must exercise due care.

Denial of discharge: The bankruptcy court may dismiss a case if the Debtor commits bankruptcy fraud, or fraud on its creditors. The creditor’s rights back to continue collecting their debts.

Disclosure statement:  This is a bankruptcy process where a comprehensive disclosure document is sent to creditors to vote on a plan of reorganization in Chapter 11.

Discovery procedures: It is a process like verbal questioning or interrogatories used to obtain disclosure of evidence before trial.

Dismissal: The termination of the case without either the entry of a discharge or a denial of discharge. The bankruptcy court is allowed to dismiss a case if it deems that the debtor or three creditors should not have filed the bankruptcy or that a plan can never be formulated.

Emergency Bankruptcy Filing: A filing by the debtor which includes the petition filed to take advantage of the automatic stay and protect the debtor from repossession, harassment, foreclosure, and lawsuits.

Equity:  This the fair market value of a property minus the amount owed on the property.

Eviction: The legal process where a tenant is forced out of his or her home by the landlord. This may be in the form of actual or constructive eviction.

 Exempt Property or Assets:  These are debtor’s assets that are not non-exempt. They cannot be taken by the trustees and sold for the interest of the creditors. The debtor keeps the exempt property for use in making a fresh start after bankruptcy.

Exemptions: Certain property owned by an individual debtor that the Bankruptcy Code or State law permits the debtor to keep from unsecured creditors like homestead exemptions and tools of trade. These kinds of property are legally beyond the reach of the creditors or bankruptcy trustee. Each state has different lists of assets you can keep in bankruptcy.

 Executory Contract: Executory contracts are contracts or leases under which both contracting parties to the agreement have duties remaining to be performed.

Fee examiner: A bankruptcy fee examiner is the person or entity appointed by the court to monitor fees paid to professionals like bankruptcy attorneys and petition prepares in bankruptcy cases.

Fiduciary:   A fiduciary duty is created when a person or entity is entrusted with duties on behalf of another or entity like a bankruptcy trustee. The one entrusted with the fiduciary duty must exercise good faith, loyalty and due diligence in the performance of that duty.

Filing Date: The date which the debtor file the bankruptcy petition. Assets purchased before this date is part of the bankruptcy estate. Assets purchased after bankruptcy is filed belongs to the debtor.

Filing Fees – It is the amount of money that it will cost a debtor to file a bankruptcy case. The current filing fee as of January 1, 2010, for Chapter 7 the fee is $299, for Chapter 11 it is $1,039, and for Chapter 13 it is $274.

First meeting of Creditors- also known as 341 meeting: It is a mandatory meeting between the debtor and all the creditors. The debtor’s schedules of financial information may be reviewed at this meeting.

 Foreclosure: When your home is repossessed and sold by your creditor’s because you are behind on your mortgage obligation and payment.

Fraudulent Conveyance: This is when a transfer of valuable assets is made for less than adequate consideration in an attempt to deceive the creditors.

Fresh Start: Fresh start is one goal of the bankruptcy code to allow debtor’s a new beginning after bankruptcy.

 Garnishment: An official court order allowing the creditor to collect part of a person’s salary to satisfy his debt owed.

Homestead Exemption: Federal or state exemption that is applicable in the county where the debtor calls his or her resident when the bankruptcy was filed.

General, unsecured claim: These are claims that do not have priority for payment because the creditor holds no priority or collateral like credit cards, medical bills and personal loans are general, unsecured claims.

Indemnify: Indemnify is to guarantee or insure against any personal or business loss that one might suffer. It is used in bankruptcy by one spouse to undertake the financial responsibility of the other spouse regarding their joint debts. 
Insider of individual debtor: Any relative of the debtor or of a general partner of the debtor who has information or may benefit from the debtor in some capacity. It could also be a partnership in which the debtor is a general partner, general partner of the debtor or a corporation of which the debtor is a director.

Insider of corporate debtor: An insider in a corporate environment may be director, officer, or person in control of the debtor in that corporation.

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

Involuntary Bankruptcy: Bankruptcy which originates and is filed by at least three of the debtor’s creditor’s to whom at least $5000.00 in unsecured debt is owed.

Joint administration: This happens when the court combines two or more bankruptcy proceedings for administrative convenience.

Lien: It is an interest in real or personal property usually recorded to secure a debt. The lien may be voluntary or involuntary. Mortgage in real property is a good example of voluntary lien while judgment lien and tax lien is an example of involuntary lien. It can make the transfer of property very difficult.

Liquidated: It is a creditor's claim for a fixed amount of money. An unliquidated debt is one where the debtor has liability but the exact monetary measure has not been determined like tort claims.

Liquidation Bankruptcy: It is also known as chapter 7 bankruptcy by some while chapter 12 & 3 is known as reorganization.  In liquidation the debtor’s assets are sold to pay the creditors while in reorganization the debtor’s payments to the creditors are readjusted and paid over 3 to 5 years. 

Means Test Bankruptcy Code applies a "means test" to determine whether a debtor’s chapter 7 bankruptcy filing is presumed to be an abuse of the Bankruptcy Code requiring dismissal or conversion of the case to a different chapter. Debtors who fail the means test may convert their case to another chapter of bankruptcy usually chapter 13.

Meeting of Creditors also known as 341 meeting: The individual filing the bankruptcy must appear at a meeting with the trustee to be examined under oath about assets and liabilities.

Motion to Lift the Automatic Stay: A request by a creditor or lender to release or allow the creditor to take an action against a debtor or the debtor’s property that would otherwise be prohibited by the automatic stay.

No-Asset Case: Chapter 7 bankruptcy cases that has no assets available to pay any portion of the creditors' unsecured claims.

Non Dischargeable Debt: A debt that cannot be eliminated or wiped off in bankruptcy like child support, student loans, and recent taxes. Bankruptcy discharge does not wipe them off the debtor’s record.

Nonexempt Property: These are properties that are not exempt properties. Chapter 7 Trustees may dispose these assets for the benefit of the creditors.

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

Objection to Dischargeability: A filing by trustee's or creditor's objecting to the debtor being released from personal liability or debts. 

Objection to Exemptions: A filing by trustee's or creditor's objecting to the debtor's attempt to claim certain property as exempt from liquidation bankruptcy.

Personal Bankruptcy:  Bankruptcy which is filed by debtor.  It is known by some as household bankruptcy, consumer bankruptcy or better wage-earner bankruptcy. Please contact our bankruptcy lawyer and attorney at our bankruptcy law office located in San Jose, San Clara County, Alameda County, San Mateo County, and San Francisco County area at 408-912-5983.

Personal Property: These are the assets you own that is not real estate like cash, furniture, jewelry and cars.

Plaintiff: Plaintiff a person or business that files a formal document in court against the defendant.

Post petition Transfer: A transfer of an individual’s or his business assets made after the commencement of the case.

Preference or Preferential Debt Payment: A debt payment made to a creditor in the 90-day period before a debtor files bankruptcy or within one year if the creditor was an insider which favors the creditor more than other chapter 7 creditors.

Priority Claim: An unsecured claim that is paid first if there are distributions to be disposed from the bankruptcy estate. Priority claims include alimony, child support, and trustee fees. These distributions are paid in the order of priority. 

Proof of Claim: A formal legal document filed by creditors to assert their rights to payments from the bankruptcy estate. The bankruptcy court provides an official form for this purpose.

Reaffirmation Agreement: An agreement entered into after bankruptcy filing between the debtor and the creditor to continue paying a dischargeable debt after bankruptcy. This will allow the debtor to keep the property like automobile.

Real Property: Anything permanently attached to land including mobile homes.

Receiver: An official appointed by the court to undertake the custody of a debtor's property or assets.

Reinstatement: An agreement between the debtor and the mortgage lender allowing the debtor to pay off his/her past debts.

Repayment Plan: It is a plan to repay majority of the creditors the amount owed outside of bankruptcy in chapter 13 bankruptcy.

Reorganization: It is a used in chapter 11 and 13 bankruptcy to adjust the debtors payment plan.  The debtor agrees with creditors on a plan for payment of their claims which the debtor must follow.

Restructuring: An attempt by a creditor to rearrange his or her finances and settle debts.

Repossession: This occurs when the lender takes the property or an asset which is used as a collateral back because the debtor defaulted on the loan.

Request to lift the Stay: Creditor written request filed in court to lift the automatic stay so that the creditor can take action against the debtor or the property of the bankruptcy estate.

Property of the Estate:  Not an exempt property. It is part of the bankruptcy estate.  The proceeds from the sale of the property of the estate are distributed to the creditors.

Schedules:   The official bankruptcy form which the debtor must file to describe his or her required lists of assets and liabilities to commence a bankruptcy case.

Sherriff’s Sale: This is a process where government official conducts a sale of a property at public auction and distributes the proceeds to the lender or creditor to pay down the debts or discharge the debts.

Secured Debt: A debt secured collateral which may be in a form of voluntary lien like mortgage or involuntary lien like a judgment or tax lien.

 Set-off: This is a process where same parties discharge their debts through counter claim.

Skeleton Filing: Certain bankruptcy filing may be allowed to continue by some courts despite the facts that not all paperwork has been filed. The remaining documents will be filed in court later. This is mainly used during emergency.

Statement of Financial Affairs: An official bankruptcy  form or questionnaire to the debtor requesting answers regarding sources of income, recent expenses, recent charges, transfers of property, and other non-exempt transfers for the several years prior to filing bankruptcy. 

Statement of Intention: A declaration which the Chapter 7 debtor must file to inform the court and secured creditors whether he or she plans to reaffirm the debt, redeem the debt, or surrender the property to discharge the debt. 

Surrender: Giving up the collateral like home, car, business equipments, and jewelry back to the creditor to discharge the debt.

Transfer: A process that enables a debtor to dispose parts of his or her property.

Trustee:  A trustee is an official appointed by the bankruptcy court to handle liquidation or reorganization of assets of the debtor. Chapter 7 bankruptcy trustee conducts the Meeting of Creditors, reviews debtors petition, recovers any assets that are not exempt and distributes the proceeds to the creditors. Chapter 13 Trustees conducts Meeting of Creditors, receives payments under the Chapter 13 Plan and pays your creditors according to the agreed payment plan.

United States Trustee: A government official appointed by the Department of Justice who is responsible for the bankruptcy trustees, bankruptcy petition preparer’s, auditing bankruptcy cases for fraud and  enforcing the bankruptcy laws.

Unliquidated claim:  A claim for which a certain value has not been allocated

Unsecured Creditor:  A credit without collateral security. The creditor’s claim has priority below most secured debts.

Unsecured Debt:  A Creditor whose loan is not secured by Collateral like credit cards, doctors' bills and personal loans.

Voluntary Bankruptcy: Bankruptcy filing which is filed by the debtor.

Wildcard exemption: Some states like California allow debtors to apply a certain amount of money to a property to make it exempt.

Please contact Chapter 7 bankruptcy lawyer and attorney at our Chapter 7 bankruptcy law office located in San Jose, San Clara County, Alameda County, San Mateo County, and San Francisco County area at 408-912-5983.

Geoffrey Nwosu San Jose ca bankruptcy attorney & lawyer Disclaimer: California bankruptcy attorney & lawyer, chapter 7 bankruptcy, chapter 13 bankruptcy, personal & consumer bankruptcy, foreclosure or other bankruptcy debt relief laws information presented at this site should neither be considered as a legal advise nor formation of attorney, lawyer or counsel relationship. Do not take any information presented here as a promise or guarantee. Contact our San Jose Oakland San Francisco bankruptcy & debt relief law firm to discuss your legal options on your particular case with our attorneys & lawyers. We do not take cases from outside the state of California

 

 

 

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Law Offices of Geoffrey C. Nwosu

1710 Hamilton Ave.
San Jose, CA 95125

Phone:   
(408) 912-5983
(408) 375-7703
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