Legal terms can often be confusing when you first hear them, but if explained in a simple manner, most are quite easy to understand and remember. Whether you are a young legal professional trying to excel at bankruptcy law or are required to learn these terms as part of your job, the following list of 15 common bankruptcy terms will serve as a quick and easy reference.
A lawsuit filed by creditors during bankruptcy proceedings in order to register their objection to the discharge of a particular loan owed to them by the defaulting debtor.
It is a meeting where all creditors come together for a questioning round with the debtor. The debtor is required to provide answers pertaining to their financial condition under oath, in the presence of an examiner.
Bankruptcy is a legal declaration by a business enterprise or an individual that they no longer have the means to pay off their loans. When a business or person declares bankruptcy, it is called voluntary bankruptcy. Alternatively, creditors (persons or institutions) can also file a petition against a defaulting debtor. This gives the creditors an opportunity to try and recover all or at least part of the sums owed to them by a bankrupt organization or person.
Chapter 7 Trustee
An officer appointed by the court to oversee the bankruptcy proceedings of a case. The trustee is entrusted with the task of liquidating the debtor’s property for the benefit of the creditors.
Chapter 13 Trustee
The individual who is in charge of a chapter-13 bankruptcy case. They are required to fulfil multiple responsibilities, similar to those of a chapter-7 trustee. In addition, they are required to keep track of payments made by the debtor to the creditors, stay informed about the debtor’s repayment plan, and discharge the payments received to individual and institutional creditors.
As the term indicates, this is a type of bankruptcy case initiated to reduce or remove debts incurred on purchasing consumer goods (also known as consumer debts).
It is a useful measure to determine the credit history of an individual or business entity. Credit rating is calculated on the basis of the possibility of a business or person to default on their loans. Lending institutions use credit scores provided by third-party credit-rating agencies to determine if they should lend to an individual or corporate.
Debt adjustment refers to the process of making adjustments and arrangements during bankruptcy proceedings that allow for an alternate route to settlement of bad debts. These revised arrangements serve as a practical alternative to the original repayment agreement between the debtor and the creditor.
Discharge refers to the legal process of eliminating debt by filing a bankruptcy case. By declaring themselves bankrupt or insolvent, debtors are no longer required to pay off the debt—except if there is a lien (defined later) securing a particular debt.
As the term indicates, exemptions include the properties of debtors that creditors cannot lay claim to when trying to recover their funds through a bankruptcy petition. The type and value of property included in the exemptions list is determined by the state and federal bankruptcy laws.
Foreclosure of real estate
Foreclosure refers to the process of gaining ownership of a property by the lender if the debtor fails to pay mortgage on the said property.
Homestead refers to a house. Homestead liability exemption prevents lenders from using the debtor’s home (or farm etc.) to recover their dues. Homestead exemption laws are different for each US state and define the limit up to which a debtor’s personal property is exempted from being used to pay off the creditors.
A joint bankruptcy petition filed by both husband and wife.
A right of ownership that can be used by the lender to recover a bad loan; for instance, if a homeowner defaults on mortgage payments, the lending bank can initiate foreclosure proceedings and claim ownership to the property for which the loan was taken.
The process of selling the properties of a debtor to obtain funds to pay off the creditors.
If you’re looking for bankruptcy attorneys in Dallas who have the experience and the expertise to deal with bankruptcy cases in accordance with the ever-evolving state and federal bankruptcy laws, seasoned bankruptcy lawyers recommend that you entrust this crucial task to only the best local legal firm that understands how local businesses function as well as the challenges they face in trying to stay afloat.
Popular How To Guides
How To Be A Better Trader
In the process of trading with currency pairs, there have to be some good preparation. You may think about the...
How to Save Money on Healthcare
The American health insurance system is complicated; in 2017, one in five uninsured adults went without healthcare because they couldn’t afford the...
How To Get The Best Car Insurance in Canada – 10 Key Facts
Automobile insurance can be tricky to understand with complex terminologies and a whole bunch of rules and regulations that differ...
How to Fund Your Trips as a Digital Nomad
There is certainly no shortage of people hopping on the remote online business bandwagon. Some of these people have even...
How to Find a Competent Road Accident Lawyer
Whenever there is a road accident involving a commercial vehicle, corporations and insurance companies mobilize their vast resources to employ...
How To Know The Difference Between Different Healthcare Facilities
The healthcare facilities in the US have evolved a lot over time. With the technological advancements in the industry, medical...
How To Save Money When Buying Your First Car
Congratulations! You passed your driving test! You are now free to venture out on the open road, but you need...
How To Setup An Efficient Manufacturing Process
In modern business, efficiency is everything. If you do not have efficient operations processes in all aspects of business, it...
Business4 years ago
5 Things You Must Consider Before Starting A Construction Company
Non Featured3 years ago
How To Get Into A New Sport: 10 Inspiring Tips
Cars & Vehicles5 years ago
How To Deal With A Driving Offence (Quick Tips)
Games / Video Games3 years ago
How To Connect a Mouse and Keyboard to Your PlayStation 4
Non Featured3 years ago
How to Spend Your Savings Responsibly For An Easier Retirement
Cleaning6 years ago
How to Make a Shower Tray Look Like New
Fun3 years ago
How to Survive a Zombie Apocalypse
Home, DIY and Garden6 years ago
How To Build Your Own Fitted Wardrobes