Bankruptcy terms and definitions
Thinking of filing a New York bankruptcy petition? You need to understand the terms used in bankruptcy proceedings. Below are a list of common bankruptcy terms and their definitions:
Assets: These are anything and everything the debtors owns. It may be tangible such as houses, cars, or jewelry. Assets may also be intangible such as the goodwill of a business, the right to sue another person, stock options or future interests in a will.
Automatic stay: This is an injunction which the bankruptcy court issues immediately upon the filing of a bankruptcy petition. It prevents creditors from filing suits to collect from the debtor.
Bankruptcy estate: This is all the legal and equitable interests of the debtor at the time he filed the bankruptcy petition. From this, the debtor may exclude some property as exempt but the remaining properties will be liquidated. This will then be used to pay for the costs of the bankruptcy proceedings and the claims of creditors.
Chapter 7: This is the most common type of bankruptcy proceeding and it is also called a liquidation proceeding. It is available to individuals, married couples, partnerships and corporations.
Chapter 13: This is a bankruptcy proceeding that allows individuals with debts to adopt a repayment plan out of future income the debtor will receive over three or five years.
Confirmation: This is an order of the bankruptcy court that makes a repayment plan binding upon the debtor.
Conversion: This occurs when a petition under one chapter of the Bankruptcy Code is converted into a case under another chapter of the Bankruptcy code.
Creditor: This is the person or business organization to whom a debtor owes money or to whom the debtor owes a legal obligation.
Debtor: The debtor is the person, partnership or corporation who is liable to pay for debts and who is the subject of a bankruptcy petition.
Discharge: This is the elimination of a debt through a bankruptcy proceeding. A discharged debt is one that can no longer be enforced against the debtor.
Dischargeable Debts: These are a type of debt which may be eliminated through bankruptcy proceedings. Support and criminal restitution are not dischargeable debts.
Exempt properties: This refers to properties that are exempted or removed from the bankruptcy estate. They are not available to pay the claims of creditors. Federal law and state law have distinct lists of exemptions and the debtor can choose which list to use. These exempt properties will enable the debtor to make a fresh start after bankruptcy.
Schedules: These are the lists of assets and liabilities that a debtor needs to file with the petition for bankruptcy.
Secured debt: These are claims which are secured by a lien on the property of the debtor by reason of a contract, a judgment or a tax lien.
Trustee: A court appointed person who reviews the debtor’s schedules and represents the creditors in a Chapter 7 and Chapter 13 bankruptcy case.
We at the Maxwell Law Firm, PLLC assist client debt settlement, foreclosure defense, tax collection defense, filing for chapter 7 and chapter 13 bankruptcy and mortgage home loan modifications. Contact us and speak to our competent and experienced New York Bankruptcy Attorney so that you can get the debt relief you are seeking. Please give us a call at 718-701-0095 to discuss your options.