Bankruptcy Glossary

See Section 341 meeting.

The right given to a secured creditor that the collateral will not be diminished during the bankruptcy proceedings.

Debts incurred by the debtor relating to the administration of the Chapter 13 plan, incurred with court approval after the bankruptcy filing. Also known as administrative expense claim.

A lawsuit arising in or related to a bankruptcy case, commenced by filing a complaint with the court. Examples include complaints to determine validity of liens and their dischargeability.

The amount a debtor is behind on monthly payments. For example, if a debtor is 2 months behind on $1,000 mortgage payments, the total arrearage is $2,000.

Property owned by the debtor that has value — including cars, houses, trusts, businesses, and money.

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

An injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.

A legal procedure for dealing with debt problems of individuals and businesses; specifically, a case filed under one of the chapters of title 11 of the United States Code.

The informal name for title 11 of the United States Code (11 U.S.C. §§ 101–1330), the federal bankruptcy law.

The bankruptcy judges in regular active service in each district; a unit of the district court.

All legal or equitable interests of the debtor in property at the time of the bankruptcy filing, including property in which the debtor has an interest even if owned or held by another person.

A judicial officer of the United States district court with decision-making power over federal bankruptcy cases.

The document filed by the debtor (in a voluntary case) or by creditors (in an involuntary case) that opens the bankruptcy case.

The chapter of the Bankruptcy Code providing for "liquidation" — the sale of a debtor's nonexempt property and the distribution of proceeds to creditors.

The chapter of the Bankruptcy Code providing for reorganization, usually involving a corporation or partnership.

The chapter of the Bankruptcy Code providing for adjustment of debts of a "family farmer" or "family fisherman."

The chapter of the Bankruptcy Code providing for adjustment of debts of an individual with regular income. Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.

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

Property that secures a loan.

A bankruptcy judge's approval of a plan of reorganization or payment plan in chapter 12 or 13.

Debts incurred for personal, as opposed to business, needs.

Changing chapters in bankruptcy (e.g., converting from Chapter 13 to Chapter 7).

One to whom the debtor owes money or who claims to be owed money by the debtor.

Refers to two events in individual bankruptcy cases: (1) a briefing from a nonprofit budget and credit counseling agency required before filing; and (2) an instructional course in personal financial management required before discharge is entered.

The average monthly income received by the debtor over the six calendar months before commencement of the bankruptcy case, including regular contributions to household expenses from nondebtors.

A person who has filed a petition for relief under the Bankruptcy Code.

The failure to fulfill an obligation.

A release of a debtor from personal liability for certain dischargeable debts. A discharge prevents creditors from taking any action against the debtor to collect the discharged debts.

A debt for which the Bankruptcy Code allows the debtor's personal liability to be eliminated.

The termination of a bankruptcy proceeding without the release of a debtor from personal liability for certain dischargeable debts.

The schedule on which the clerk of the court records all court filings relating to a case.

Debts owed to a child, spouse, or government entity for alimony, maintenance, or support.

The value of a debtor's interest in property that remains after liens and other creditors' interests are considered. Example: If a house valued at $100,000 is subject to an $80,000 mortgage, there is $20,000 of equity.

Generally includes contracts or leases under which both parties have duties remaining to be performed. A debtor may assume or reject an executory contract.

Certain property owned by an individual debtor that the Bankruptcy Code or applicable state law permits the debtor to keep from unsecured creditors, such as a homestead exemption or tools of the trade.

Costs to file bankruptcy petitions. See the court's fee schedule at azb.uscourts.gov/filing-fees for current amounts.

The sale of real property due to failure to make mortgage payments.

To secure or protect against someone else's financial burden.

Any relative of the debtor or of a general partner of the debtor; partnership in which the debtor is a general partner; general partner of the debtor; or a corporation of which the debtor is a director, officer, or person in control.

One bankruptcy petition filed by a husband and wife together.

A charge on specific property designed to secure payment of a debt or performance of an obligation.

The sale of a debtor's nonexempt property and the distribution of the proceeds to creditors. See Chapter 7.

A calculation used to determine whether an individual debtor who wants to file for Chapter 7 is eligible to do so, or must instead file for Chapter 13.

A request by a creditor to allow the creditor to take action against the debtor or the debtor's property that would otherwise be prohibited by the automatic stay.

A Chapter 7 case where the trustee determines there is no nonexempt property available to distribute to creditors.

A debt that cannot be eliminated in bankruptcy. Common examples include child support, alimony, certain taxes, and most student loans.

A party who has standing to be heard by the court in a matter to be decided in the bankruptcy case — including the debtor, U.S. trustee, case trustee, and creditors.

A business not authorized to practice law that prepares bankruptcy petitions.

A debtor's detailed description of how the debtor proposes to pay creditors' claims over a fixed period of time.

Claims or events arising after the filing of a bankruptcy case.

An unsecured claim that is entitled to be paid ahead of other unsecured claims. The Bankruptcy Code establishes the order in which priority claims are paid.

An agreement by a debtor to continue paying a dischargeable debt after the bankruptcy, usually to keep collateral such as a car pledged as security for the debt.

A procedure where a debtor can keep certain secured property by paying the creditor the value of the collateral rather than the full debt owed.

Detailed lists filed by the debtor along with the petition showing the debtor's assets, liabilities, and other financial information.

The meeting of creditors required under section 341 of the Bankruptcy Code at which the debtor is questioned under oath by the trustee and any creditors who wish to attend.

A creditor holding a claim against the debtor who has the right to take and hold or sell certain property of the debtor in satisfaction of some or all of the claim.

Debt backed by a mortgage, pledge of collateral, or other lien. Examples include home mortgages, auto loans, and tax liens.

The representative of the bankruptcy estate who exercises statutory powers, principally for the benefit of the unsecured creditors, under the general supervision of the court and the direct supervision of the U.S. trustee or bankruptcy administrator.

An officer of the U.S. Department of Justice responsible for supervising the administration of bankruptcy cases, estates, and trustees; monitoring plans and disclosure statements; monitoring creditors' committees; monitoring fee applications; and performing other statutory duties.

A claim or debt for which a creditor holds no special assurance of payment, such as a claim for which the creditor has no lien on the debtor's property. Examples include credit card debt and medical bills.

Debt for which the creditor holds no lien on specific property as collateral.

An informal name for Chapter 13 bankruptcy, which historically allowed individuals with regular wages to propose a plan to repay their debts over time.