Common Bankruptcy Terms Explained
The process of bankruptcy can be confusing for debtors and creditors. Understanding common bankruptcy terms is important in order to make informed choices. A bankruptcy lawyer can explain all aspects of the bankruptcy process and provide personalized legal advice with resolving debt issues. Call Leiderman Shelomith Alexander + Somodevilla, PLLC to get valuable legal assistance with all aspects of bankruptcy, student loan debt issues, and insolvency matters. We represent debtors, creditors, and bankruptcy trustees throughout the bankruptcy or debt relief process.
Common Bankruptcy Terms Explained
Understanding some of the common terms that you may hear during and after a bankruptcy filing can help you to get a clearer picture of how the bankruptcy process works. These common terms include:
- 341 Meeting: A meeting of the debtor, the bankruptcy trustee, and any creditors who choose to attend. The debtor is questioned under oath.
- Automatic Stay: An injunction that goes into effect when bankruptcy is filed (with few exceptions) to prevent any further collection efforts, including wage garnishment, foreclosure, or repossession.
- Bankruptcy Estate: All of the debtor's legal and equitable interests in real and personal property at the time that a bankruptcy is filed.
- Bankruptcy Trustee: An individual who is appointed in certain bankruptcy proceedings to act as a fiduciary for the interests of the creditors.
- Chapter 7: A liquidation proceeding in which the debtor’s non-exempt assets, if any, are sold by a Chapter 7 trustee and the proceeds distributed to creditors, and where an individual debtor receives a discharge of his or her debts. In the majority of consumer Chapter 7 proceedings, the debtor retains all of his or her property
- Chapter 11: The chapter of the Bankruptcy Code used by individuals and businesses to reorganize debts and financial obligations to facilitate repayment to creditors over time.
- Chapter 13: The chapter of the Bankruptcy Code that enables individuals with regular income to develop a plan to repay all or part of their debts over time.
- Credit Counseling: Individual or group counseling provided by an approved agency that individual debtors are required to attend before filing for bankruptcy protection.
- Discharge: Release of personal liability for eligible debts. When a debt is discharged, a debtor no longer has any legal obligation to repay it and creditors may no longer make an effort to collect it.
- Dischargeable Debt: A debt which may be discharged in bankruptcy.
- Exempt Property: Property that a debtor can keep.
- Secured Debt: Debt that has collateral associated with it, such as a mortgage loan (the lender has a security interest in the house).
- Unsecured Debt: Debt that does not have collateral associated with it, such as credit card debt.
These are just a few of the common terms you may encounter during bankruptcy proceedings. The Bankruptcy Code is a complex legal code full of technical terms that must be understood as you move though a bankruptcy filing. Getting personalized legal advice with all phases of bankruptcy is advisable to ensure that the process goes smoothly.
Contact a Hollywood Bankruptcy Law Firm
The Hollywood bankruptcy lawyers of Leiderman Shelomith Alexander + Somodevilla, PLLC can provide you with comprehensive assistance during bankruptcy. Give us a call today to learn about the assistance we offer debtors, creditors, and trustees throughout Miami-Dade and Broward counties, including the cities of Fort Lauderdale, Hollywood, Pembroke Pines, and Coral Cables.