Glossary or Bankruptcy Terms

341 Meeting
A meeting at which the debtor is questioned under oath by creditors, a trustee, examiner, or the United States trustee about his/her financial affairs.

Adequate Protection
Payment to a secured creditor to protect the value of the creditor’s lien during the bankruptcy, a proceeding from loss due to depreciation, or non-payment of a senior lien.

Adversary Proceeding
A lawsuit arising in, or related to, a bankruptcy case that is commenced by filing a complaint with the bankruptcy court.

Assets
Assets are defined as every form of property owned by the debtor.  These can include intangible items as well, such as stock options and business goodwill.  All assets must be disclosed by the debtor.

Assume
An agreement to continue performing duties under a contract or lease.

Automatic Stay
An injunction that automatically stops lawsuits, foreclosure, garnishments, and other collection activity against the debtor the moment a bankruptcy petition is filed.

Avoidance
The Bankruptcy Code permits some types of liens to be eliminated, and is sometimes called “lien stripping.”

Bankruptcy
A legal procedure for dealing with debt problems of individuals and businesses.

Bankruptcy Code
An informal name for the United States Code, Title 11.

Bankruptcy Estate
All equitable and/or legal interests of the debtor in real and personal property at the time of the bankruptcy filing.

Bankruptcy Judge
A judicial officer of the United States Bankruptcy Court who has the decision-making power over federal bankruptcy cases.

Bankruptcy Petition
A formal request for the protection of the federal bankruptcy laws.

Bankruptcy Trustee
An individual or corporation appointed in all Chapter 7 and Chapter 13 cases to represent the interests of the bankruptcy estate and the debtor’s creditors.

Chapter 7
The most common form of bankruptcy, providing for “liquidation” of the debtor’s non-exempt property and distribution of the proceeds to creditors.  It is available to individuals, married couples, partnerships, and corporations.

Chapter 11
A reorganization proceeding, involving a business, individual or married couple that includes a reorganization plan. Creditors are paid in whole or in part over time.

Chapter 13
A repayment plan providing adjustments of debts for individuals who have a regular income. It, normally spans three to five years.

Claim
A creditor’s assertion of a right to payment from a debtor or the debtor’s property.

Collateral
Property that is subject to a lien.  A creditor with collateral rights is considered a secured creditor and has additional protection for the claim secured by the collateral.

Confirmation
The court-ordered plan approval for repayment of debts in a Chapter 11 or 13 filing.

Consumer Debt
Debts incurred by an individual for personal, family, or household purposes, as opposed to business debts.

Contingent Claim
A claim that may be owed by the debtor under certain circumstances, such as being a co-signer on another person’s loan if that person defaults.

Creditor
A person or organization to whom the debtor owes money, or that claims to be owed money, by the debtor.

Credit Counseling
Individual debtors must attend credit counseling before filing under any bankruptcy code.

Debtor
The entity that is the subject of the bankruptcy case (individual, couple, partnership, or corporation).

Debtor in Possession
In a Chapter 11 case, the debtor in possession is a fiduciary for the creditors of the estate, and has the duty to care for the assets remaining in the possession of the debtor.

Defendant
An individual or business against which a lawsuit is filed.

Discharge
The elimination of debt through a bankruptcy case.  A discharge releases the debtor from personal liability for certain debts and prevents further action from creditors who are owed these debts.

Dischargeable Debt
A debt that can be eliminated in bankruptcy, according to the bankruptcy code.

Disclosure Statement
A document prepared by a Chapter 11 debtor designed to provide information to creditors, enabling a creditor to evaluate the Chapter 11 plan.

Equity
The value of a debtor’s property after liens and other interests in the property are deducted.

Exempt
Property that a debtor may prevent creditors from recovering.

Exemption
The property that a debtor is permitting to keep from creditors.  It is legally beyond the reach of creditors.

Fiduciary
One who is entrusted with duties on behalf of creditors.  A fiduciary’s good faith, loyalty, and diligence are of the upmost importance.

Fraudulent Transfer
A transfer of the debtor’s property made with the intention of defrauding, or for which the debtor receives less than the transferred property’s value.

Indemnify
To guarantee against any loss which another may suffer.  Also called a “hold harmless” clause.

Joint Petition
One bankruptcy petition filed by a husband and wife together.

Lien
An interest upon specific property that secures a debt or performance of an obligation.  It may be voluntary, such as a mortgage, or involuntary, such as a tax lien.

Liquidated Claim
A creditor’s claim for a fixed amount of money.

Liquidation
The sale of a debtor’s property with the proceeds to be used for the benefit of creditors.

Means Test
A screening test intended to determine whether or not a debtor is truly unable to repay their debts.  Those who fail the test may be converted to another chapter of bankruptcy.

Meeting of Creditors
A meeting at which the debtor is questioned under oath by creditors, a trustee, examiner, or the United States trustee about his/her financial affairs. This is sometimes also termed a “341 meeting.”

Non-Dischargeable Debt
A debt that cannot be eliminated in bankruptcy.  It remains legally enforceable despite the bankruptcy discharge.

Personal Property
Assets not associated with real property, such as automobiles, furniture, jewelry, etc.

Petition
This document initiates a bankruptcy case, and institutes an “automatic stay.”

Priority
A ranking of unsecured claims by the bankruptcy code that determines which claims have a higher priority than others.

Priority Claim
This type of claim is entitled to be paid ahead of other secured claims that do not have priority status.

Proof of Claim
The form filed with the court describing the reason a debtor owes a creditor money.

Property of the Estate
All legal and equitable interests of property of the debtor that is usually sold by the trustee.

Reaffirmation Agreement
An agreement by a Chapter 7 debtor to continue paying a dischargeable debt after the bankruptcy, usually for the purpose of keeping collateral or mortgaged property that would otherwise be subject to repossession.

Schedules
A list submitted by the debtor that includes assets, liabilities, and other financial information to begin a bankruptcy case.

Secured Creditor
An individual or business holding a claim against the debtor that is secured by a lien on property or that is subject to a right of setoff.

Secured Debt
Debt backed by a mortgage, pledge of collateral or other lien, for which the creditor has the right to pursue the pledged property upon default.

Statement of Financial Affairs
A series of questions the debtor must answer in writing regarding sources of income, transfers of property, lawsuits by creditors, etc.

Statement of Intention
A declaration made by a Chapter 7 debtor concerning plans for dealing with consumer debts that are secured by property of the estate.

Transfer
Any mode or means by which a debtor disposes of his/her property.

Trustee
A trustee is appointed in Chapter 7 and 13 cases to review the debtor’s schedules and protect the interests of the creditors.  The trustee’s role varies with the type of bankruptcy case.

Unsecured
A claim or debt that has no collateral attached to the debt, such as most consumer debts.

Unsecured Claim
A claim for which a specific value has not been determined.

Unliquidated Claim
A claim for which a specific value has not been determined.

Unscheduled Debt
A debt that should have been listed by a debtor in the schedules filed with the court, but was not filed.

Unsecured Claim
A claim or debt for which credit was extended based only upon the creditor’s assessment of the debtor’s future ability to pay.

A WORD FROM OUR CLIENTS

  • Red Hill Law Group really knows their stuff. They certainly don’t try to push you into bankruptcy. They carefully explained everything, including how a short sale could impact you, and how sometimes it’s better to file Chapter 13, keep your house and make payments. They really seem to care about their clients and that’s very important to me. I recommend them highly.

     

  • The team at Red Hill Law Group took the time to explain our options and how they could help us climb out from under what seemed a mountain of debt.  Bert Briones was so professional, responsive and understanding of our situation it gave us the reassurance we needed to move forward.    I would recommend the Red Hill Law Group team to anyone struggling with credit card debt and unsure of what next steps to take.

  • Bert and his staff are truly exceptional. They treated me with respect and the utmost sensitivity. They were always easy to reach by phone too, which is huge. Altogether, working with them was a very positive experience for me, and I could not recommend them highly enough.

  • They made my hard situation so easy for me.  Accomodated my work schedule and so down to earth and friendly.  Told me exactly what to expect up front and every thing went exactly as planned.  Kelly, Bert’s assistant, was awesome too.  She is sweet, professional and organized!

  • Red Hill Law Group has helped in a way that would have been impossible for me to do on my own. They have negotiated on my behalf and have come up with a reasonable re-payment plan with my creditors.  Although this has been a long journey for me I look forward to the day that I am completely debt free and I will owe that respect to this law group.

  • Red Hill Law Group has been very helpful and resourceful. I was treated with respect and care.  The results were beyond my expectations.

Orange County Bankruptcy Attorney Bert Briones

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