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First meeting of the creditors. Debtor is required to attend the meeting and creditors may attend.
Bankruptcy term referring to the order of payment to different creditors, which is determined by the U.S. Bankruptcy Code.
Abusive Overdraft Loan
Small amount, short-term, high-interest loans given by banks to those who overdraw their accounts.
Right of a person or company that has interest in the debtor’s property to assurance that its interest won’t be devalued during the debtor’s bankruptcy filing.
Adjustable Rate Mortgage (ARM)
A mortgage loan with a monthly payment that “adjusts” or changes from month to month. Compare to a fixed rate mortgage, in which payments remain constant throughout the lifetime of the loan.
Administrative Claim/Administrative Expense Claim
Debt accumulated after the bankruptcy filing. You must have court approval to take on the additional debt. Some examples of administrative claims are: necessary costs of preserving a home, salaries, court-related costs, bankruptcy lawyer or accountant fees and trustee expenses.
Document in a lawsuit in U.S. bankruptcy court. These proceedings are initiated by a person or company filing a complaint. It may be filed by the bankruptcy trustee, other parties or the debtor himself if he wants to formally complain that a creditor violated the bankruptcy automatic stay.
Allowed Claim/Allowed Interest
Claim of a creditor that the bankruptcy court approves to satisfy the plan of reorganization.
Formal or informal agreement between creditors and the debtor about how a bankrupt company or person is permitted to operate while filing bankruptcy.
Any item of value owned by a person or entity.
An injunction (provision) of bankruptcy law that protects those who file bankruptcy from most collection actions, including garnishment, lawsuits, repossession, debt collection and foreclosure.
The bankruptcy court has the power to invalidate certain debtor obligations and transactions made before filing bankruptcy.
Date and time during a company bankruptcy reorganization that the bankruptcy court sets where all votes for accepting or rejecting the plan of reorganization must be delivered.
Legal declaration by an individual (or a company) stating an inability to pay creditors. United States Bankruptcy Code provides several versions of bankruptcy to offer individuals a “fresh start” financially after receiving a bankruptcy discharge.
After the Bankruptcy Reform Act of 1978, this was the given name to the body of U.S. bankruptcy laws.
This is the federal tribunal where bankruptcy cases are reviewed and litigated under the U.S. Bankruptcy Code.
This term refers to the debtor’s property that is subject to authority of the bankruptcy court.
The legal forms that must be filed at court for a bankruptcy case to officially begin.
An individual appointed by the U.S. Department of Justice or by the creditors in a bankruptcy case to oversee the proceedings of the bankruptcy case.
BAPCPA (Bankruptcy Abuse Prevention and Consumer Protection Act)
Bankruptcy laws passed in October, 2005.
Date is set by the bankruptcy court and is the last date that creditors can file a claim against the debtor.
The U.S. Administrative Office of the Courts divides bankruptcies into either business bankruptcy or non-business bankruptcy. Business bankruptcies involve companies.
Refers to cash and equivalents held by the debtor in Chapter 11 bankruptcy that are subject to creditors’ liens.
The U.S. Bankruptcy Code is organized into different chapters.
Type of personal bankruptcy sometimes referred to as “liquidation” bankruptcy because a bankruptcy trustee can liquidate (convert to cash) any non-exempt assets to help pay off debts.
Chapter 9 Bankruptcy
This bankruptcy chapter focuses on bankruptcies of municipalities, like cities and towns.
Chapter 10 Bankruptcy
This bankruptcy chapter is designed for small business reorganizations.
Chapter 11 Bankruptcy
This bankruptcy chapter focuses on reorganization proceeding for businesses.
Chapter 12 Bankruptcy
This bankruptcy chapter is for family farmer bankruptcies and was created in 1986.
A type of personal bankruptcy sometimes referred to as a “reorganization of debts.” Debtors work with the bankruptcy court to develop a three to five year repayment plan to eliminate their obligations to creditors.
Creditors can file these rights to repayment against a debtor. Claims can be secured, unsecured, liquidated, unliquidated, matured, unmatured, fixed, contingent, subordinated, legal or equitable.
Creditor claims are given categories, or classes, and then are ranked by priority of payment.
An asset given as security for a loan.
This is the bankruptcy court’s final approval for a plan of reorganization. Creditors must approve the plan before the court does so.
Any dispute among the involved parties that is initiated by the filing of a motion to the bankruptcy court.
Changing chapters in bankruptcy when you are already involved in a bankruptcy filing.
Proceedings that are fundamental in a filing bankruptcy case and subject to the jurisdiction of the bankruptcy court.
One who literally co-signs loan papers with somebody else.
This refers to the bankruptcy court confirming a plan of reorganization over the objection of creditor(s).
Briefing that outlines the available opportunities for credit counseling and provides assistance in performing a budget analysis.
Committee of representatives for the creditors that is appointed by the trustee. The committee works on behalf of all of the debtor’s creditors to negotiate a plan of reorganization.
Record of your credit history including your payment actions on a variety of credit sources, including credit cards, mortgage loans, rent, car loans and more.
Credit Reporting Agency (Credit Bureau)
An organization that collects, documents and reports consumer credit information. CRAs offer free credit reports to consumers, which are available at www.annualcreditreport.com.The three major CRAs are TransUnion, Equifax and Experian.
A number between 300 and 850 that measures the credit risk of an individual consumer.
Someone to whom a debtor owes money.
Someone who owes money to a creditor.
This refers to the debtor who is in control of operations.
Course designed to prepare bankruptcy filers for life after bankruptcy.
The failure to meet financial obligations.
The elimination of debt and exit of bankruptcy proceedings.
Legally excusable, as debts.
Comprehensive document detailing the plan of reorganization that is sent to creditors when they are asked to vote on the plan.
Termination of a bankruptcy filing.
Non-legal term used to describe securities, companies or people who are close to filing bankruptcy.
Date when the plan of reorganization is put into effect.
Asset’s value aside from anything owed on it (mortgages, liens, etc.).
Professional that the bankruptcy court appoints to oversee the debtor and his or her bankruptcy proceedings.
Period where a Chapter 11 bankruptcy filer has the right to file a plan of reorganization, typically during the first 120 days of the company’s bankruptcy.
Contract where some or all obligations of all parties haven’t been completed.
Assets that the bankruptcy court cannot liquidate during a Chapter 7 bankruptcy case.
Financial assessment of the viability of a business where it’s determined that the company isn’t earning the rate of return or paying its bills.
Fixed Rate Mortgage
The “traditional” home loan plan, fixed rate mortgages require borrowers to pay a constant payment over the life of the loan (usually about 30 years). Compare to “adjustable rate mortgage.”
Foreclosure (Mortgage Foreclosure)
Process followed by a bank or mortgage company to reclaim ownership of a house when a homeowner hasn’t followed the terms of the mortgage agreement.
Term referring to the transfer of significant assets from a company, which occurs when the company is considered technically insolvent or when the transfer is made for less than satisfactory consideration.
The bankruptcy court appoints a fee examiner to monitor the fees paid to bankruptcy professionals.
Casual term for new accounting policies that apply to bankruptcy. Assets are appreciated at market value rather than at a historical rate.
Period after the filing of an involuntary petition and before the dismissal of the petition.
When money owed a debtor (like part of a paycheck) is ordered given to a creditor (like a credit card company) to cover some of the debt owed.
Going Concern Value
This is the worth of a company if it were sold as a continuing business, rather than its liquidation value.
Crime of using someone’s identification information (Social Security Number, bank account information, credit card numbers, etc.) to pose as that person.
When a plan of reorganization alters the contractual rights of creditors that are deemed to be impaired. An unimpaired creditor is reasoned to agree automatically to a plan of reorganization.
Term used to describe a failing debtor. The debtor obligations exceed his or her assets and/or the debtor can’t pay his or her bills.
In bankruptcy documents, this usually refers to the equity interest of stockholders.
When bankruptcy proceedings are started by three or more creditors against a debtor.
When bankruptcy proceedings are combined for ease of administration.
Claim or mortgage on property in exchange for debt owed.
Act of converting an asset to cash.
Term referring to the collective value of a business if its assets are gradually sold.
When a company or organization is forced to let go a large number of workers at the same time, usually because of financial difficulty or reorganization.
This is a mailing list of a debtor’s creditors.
Part of the BACPA, the Chapter 7 means test is used to determine who qualifies for protection under Chapter 7 of the U.S. Bankruptcy Code. It’s based on median income comparisons, disposable income available and unsecured debts owed.
Bankruptcy caused by debts incurred from medical expenses.
A pledge to pay (a loan) backed by real estate.
Net Operating Loss (NOL)
Also referred to as tax loss carry-forward, NOL is losses that can be carried forward and applied to reduce taxable income in the future.
Debt that is legally unable to be excused in the bankruptcy court. In Chapter 7 bankruptcy cases, child support, tax debt and student loans are usually non-dischargeable and must eventually be paid by the filer.
A line of credit that requires monthly payments and does not allow repaid funds to be drawn down again from the credit limit.
Offered by payday lending stores, these short-term, small-dollar amount, high interest loans are marketed to those who need cash between paychecks.
Bankruptcy that is filed by an individual or household. It’s also called a consumer bankruptcy or wage-earner bankruptcy.
Document begins the bankruptcy proceeding.
Plan of Reorganization
Document lays out how a bankrupt entity will satisfy its creditors.
Period that occurs after the filing of a petition.
Generally refers to tactics used by lenders to convince borrowers to agree to unfavorable loan terms or to deceive the borrower in some way for profit
Occurs when a debtor pays a creditor during a specific period before filing bankruptcy and it favors one creditor over other creditors.
When a debtor and his or her creditors agree to a repayment plan or plan of reorganization before the debtor files bankruptcy.
Period that occurs before the bankruptcy petition is filed.
Claims that are related to administration expenses, employee benefits, salaries, wages, customer deposits and taxes that occur pre-bankruptcy petition.
This is a Latin word that means “proportionately”.
Proof of Claim
Form filed by a creditor that lays out its claims against a debtor filing bankruptcy.
Term for the person appointed by the bankruptcy court that takes guardianship of the debtor’s property.
When a Chapter 11 bankruptcy filer successfully fixes his or her business’ financial problems.
Reclamation of ownership of property when payments aren’t made on time.
When the debtor and creditors agree to reorganize debts outside of bankruptcy court.
Retired Benefits Bankruptcy Protection Act
Act was passed on June 16, 1988 and allows a debtor to continue to pay employees’ insurance premiums during the bankruptcy proceedings.
Reverse Leveraged Buyout
When a leveraged buyout company streamlines its debt by issuing fresh equity in exchange for a portion (or all) of the debt it incurred during the initial leveraged buyout.
A line of credit that allows spending and repayment as desired with a variable minimum payment and a service charge.
The documents filed with the court that contain information on your assets, debts and income.
These creditors have lien(s) on the property of the debtor.
Any debt backed by collateral (material goods).
Occurs when debt is discharged or reduced when a counter claim is applied between the same parties.
A bankruptcy case where not all of the required forms have been filed.
Claims that are in the hundreds or low thousands of dollars range.
Unofficial term for a Chapter 7 bankruptcy.
Loan given to someone with a low credit score or shaky credit history.
A filer abusing the bankruptcy law or committing fraud in a bankruptcy case.
When one debtor combines his property with another debtor’s property and the mixture results in that satisfaction of their combined liabilities.
Super Priority Claim
Administrative claim that is paid ahead of the other claims.
Tax Loss Carry-Forward
Losses that can be advanced forward and applied to reduce taxable income in later years.
Agent of the court who oversees the debtor’s property for the advantage of the creditors.
United States Trustee
Employee of the U.S. Department of Justice that administers the duties of the bankruptcy court in most Chapter 7 bankruptcy and Chapter 11 bankruptcy cases. The U.S. Trustee appoints committees, trustees and examiners and dissects court filings, among other tasks.
Creditors that don’t have liens on the property of the debtor.
Any debt not backed by collateral.
United States Bankruptcy Code
Collection of statutes and regulations that governs how bankruptcy courts in the United States run.
When a debtor files bankruptcy on his or her behalf.
Arrangement with a creditor that takes place outside of the bankruptcy court to reschedule a debtor’s payment plan or reduce his or her debt.