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Los Angeles Bankruptcy Attorney, Sam Benevento; South Bay Bankruptcy Lawyer
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Los Angeles Bankruptcy Attorney, Sam Benevento; South Bay Bankruptcy Lawyer

Bankruptcy Terms

 

 


 

 

ADVERSARY PROCEEDING: A lawsuit filed within the bankruptcy case.

 

ASSUMPTION OF LEASE: A Debtor's election to continue making payments under a lease despite the bankruptcy filing.

 

AUTOMATIC STAY: Section 362 of the bankruptcy code. Upon filing bankruptcy, this section creates an injunction against all nearly collection activities. This prevents creditors from foreclosing, repossessing or seizing assets, suing the debtor, garnishing wages or otherwise harassing the debtor.

 

BANKRUPTCY ESTATE/PROPERTY OF THE ESTATE: All legal and equitable interest that the Debtor has in property as of the filing of the bankruptcy (and in some instances acquired after the filing of the bankruptcy).

 

CHAPTER 7: A bankruptcy filed under Chapter 7 of the United States Bankruptcy Code. Commonly referred to as a "straight" bankruptcy or a "liquidation". Non-exempt (unprotected) assets of the debtor can be sold by the bankruptcy trustee and the money used to pay creditors. A person must qualify for a Chapter 7 filing.

 

CHAPTER 13: A bankruptcy filed under Chapter 13 of the United States Bankruptcy Code. Commonly referred to as a "reorganization". A debtor must make monthly payments to a bankruptcy trustee for a period of 3 to 5 years. Very often the debtor only pays a percentage of debt and the remaining debt is discharged.

 

CONFIRMATION: A court order approving a Debtor's plan of reorganization in a chapter 11 or 13.

 

CRAM DOWN: A clause in a Chapter 13 Plan of Reorganization whereby the Debtor pays the creditor the value of property securing a debt instead of the entire loan balance.

 

CREDITOR: A person that money is owed to.

 

DEBTOR: A person who owes money to creditors; the person filing bankruptcy.

 

DISCHARGE: The Bankruptcy Court Order that relieves the debtor of all debts that can be forgiven under a bankruptcy.

 

DISMISSAL: When a case is removed (dismissed) from the bankruptcy court system without a discharge being given.

 

DISPOSABLE INCOME: Generally the amount a Debtor is deemed able to pay to unsecured creditors under a chapter 13 plan.

 

EXEMPTIONS: The laws that protect certain property or sources of income from seizure by creditors.

 

FRAUDULENT TRANSFER: A transfer of an asset/money for the purpose of avoiding its seizure by creditors or the bankruptcy trustee.

 

JUDGMENT PROOF: Used to describe individuals who have no assets or income that can legally be seized by a creditor.

 

MEANS TEST: The schedule used in the bankruptcy filing to determine if a debtor is eligible to file a Chapter 7 bankruptcy based upon the Debtor's family size and prior 6 months of income.

 

MEETING OF CREDITORS.: The formal hearing required by section 341 of the Bankruptcy Code at which the debtor is questioned under oath by a bankruptcy trustee (and possibly by creditors or the U.S. trustee) about his/her financial affairs. Also known as the 341 HEARING.

 

MOTION FOR RELIEF FROM STAY: A document filed by a creditor asking the Judge in the bankruptcy case for permission to take an action that is otherwise prohibited by the automatic stay (such as foreclosing on a home or repossessing a vehicle). Also known as a Motion to Lift Stay.

 

NON-DISCHARGEABLE DEBT: An obligation that cannot be eliminated in bankruptcy (such as child support, alimony, student loans and certain taxes).

 

PRE-PETITION/POST-PETITION: Before/after the filing date of the bankruptcy.

 

PREFERENCE/PREFERENTIAL PAYMENT: A payment made to a creditor by the debtor just prior to filing the bankruptcy. Depending on the type of preference, such payments can be reversed by the trustee.

 

PRIORITY CLAIM: An unsecured claim that is entitled to be paid ahead of other unsecured claims.

 

PROOF OF CLAIM A document filed with the court by a creditor stating the type and amount of debt owed.

 

REAFFIRMATION: An agreement between a Chapter 7 Debtor and a creditor to repay a loan as if the bankruptcy had never been filed, leaving the Debtor still liable for the loan.

 

REDEMPTION: A Chapter 7 Debtor's right to keep property securing a debt by paying the fair market value of the property in a lump sum to the lender. Requires Court Approval.

 

SCHEDULES: The official bankruptcy forms filed by the debtor showing the debtor's assets, liabilities, and other financial information.

 

SECURED DEBT: Debt backed by collateral;, such as a car loan, mortgage. etc.

 

TRUSTEE: The person appointed to administer and oversee a bankruptcy case and conduct the Meeting of Creditors.

 

UNITED STATE TRUSTEE (UST): A division of the United States Department of Justice. The United States Trustee assigns individual trustees to administer bankruptcy cases and also oversees all bankruptcies for fraud and abuse.

 

UNDER SECURED DEBT: Debt backed by collateral that is worth less than the full amount of the debt.

 

UNSECURED DEBT: General debt that is not backed by collateral.

 

Trust Sam Benevento with your Bankruptcy filing: Sam's Career as a Bankruptcy Lawyer spans over 25 years.

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