Bankruptcy Terms and Definitions

When you are considering bankruptcy to get out from under your debt, you may see many legal terms unfamiliar to you. If you have a brief understanding of the definitions, you may be less overwhelmed and confused by the whole bankruptcy process. This is by no means the complete list, but it will help you with the basics.

Bankruptcy

A legal proceeding to deal with debt problems related to companies and individuals; technically related to a case filed under any chapter of title 11 of the US Code of Bankruptcy.

Bankruptcy Court

Bankruptcy is held in Federal Court. The judges dealing with bankruptcy in regular services are appointed in every district.

Bankruptcy Petition

A formal application or request to the bankruptcy court to seek protection from debt collections and losing assets.

Creditor

An individual or a company that claims ownership of money by the debtor is a creditor. These lenders have not been paid in full by the debtor.

Chapter 7

This chapter of the Bankruptcy Code consists of the sale of some non-exempt property of debtors while distributing proceeds to creditors. Chapter 7 often the quickest form of bankruptcy.

Chapter 11

It covers a reorganization bankruptcy where debtors’ businesses can go through the continuation and payment of creditors with time.

Chapter 12

It involves the adjustment of a family fisherman’s debts or a family farmer according to the definitions of the same provided in the Bankruptcy Code.

Chapter13

Under this chapter of Bankruptcy Code, an individual debtor with regular income can seek adjustments of their debt. This type of bankruptcy has a repayment plan of three to five years and you keep all of your assets unless you choose to sell or surrender them.

Automatic Stay

The moment a debtor files an insolvency petition, his lawsuits, garnishments, collection activities, and foreclosures come under an automatic halt known as the automatic stay. Creditors are legally prohibited from contacting you regarding your debt.

Debtor

A debtor is a person or company that owes money to lenders.

Dischargeable Debt

Dischargeable debt is the debt under which bankruptcy allows the elimination of personal liability of the debtor to pay on the debt.

Joint Petition

When husband and wife file a bankruptcy petition jointly, or together.

If you are overwhelmed with debt and would like more information on filing bankruptcy, contact a Citrus Heights bankruptcy attorney to get the answers you need to obtain a fresh start.