While personal bankruptcy has offered millions of Americans much needed debt relief, the bankruptcy process is sometimes fraught with obscure legal phrases.
To help people in their pursuit of debt relief, listed below are several key words and phrases they might find in a bankruptcy legal dictionary.
If a word you are searching for is not listed, you may fill out the form below to ask a local attorney about bankruptcy terminology.
Petition- The first document filed with the court. This shows the court one’s intention to file for bankruptcy, and which type of bankruptcy a filer has chosen.
Chapter 7- This type of bankruptcy allows a person, particularly anyone without the income to cover their bills, to eliminate some or all of their unsecured debts, including medical bills, credit card debt, and payday loans.
Chapter 7 means test Determines a person’s eligibility for Chapter 7 bankruptcy, which is usually reserved for people with limited assets.
Chapter 13- This form of bankruptcy creates a consolidated debt payment plan, allowing a person to pay off their debts at a more reasonable pace. Chapter 13 may also help stop home foreclosure.
Bankruptcy trustee- In Chapter 13 bankruptcy a filer is assigned a trustee who is responsible for prioritizing and paying your creditors during bankruptcy. Working with a trustee allows a filer to focus on their family and work while the trustee deals with creditors.
Unsecured debts- These are debts not tied to any specific piece of property. They may be eliminated through both Chapter 7 and Chapter 13. Types of unsecured debt includes medical bills, credit card debt, utility bills and payday loans.
Automatic stay- Both Chapter 7 and Chapter 13 trigger this feature. The automatic stay is a court order that puts an halt on forms of collection including: wage garnishment, foreclosure, repossession, harassing phone calls and letters.
Bankruptcy event- There are certain life events that often lead people to file for bankruptcy. Such “bankruptcy events” include job loss, divorce, and medical emergency.
Bankruptcy filers who are flummoxed by the obscure legal language used in bankruptcy court often turn to a bankruptcy lawyer to translate and explain the complex terms and laws.
In addition to clarifying terminology, a bankruptcy lawyer may also help filers navigate their way through the bankruptcy process. To learn more, contact a local bankruptcy lawyer today for free today.