Assets: Your property, money, accounts, and claims. This includes anything you own and anything you might have a right to own at a later time
Bankruptcy stay: A legal provision that temporarily prevents creditors from pursuing debtors for amounts owed. An automatic stay goes into effect immediately when a debtor files for bankruptcy. The automatic stay ends either when the case is dismissed or closed.
Credit counseling: The legally required course you must take from a nonprofit budget and credit counseling agency. This course must be taken before filing bankruptcy.
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Debtor's Education: The legally required financial management course that must be taken after your case is filed but before your case concludes.
Discharge: the release from personal liability for certain debts of the debtor by the bankruptcy court. The discharge prevents creditors who are owed money from taking any action against the debtor to collect on those debts.
Equity: the value of the debtor’s interest in property that remains after the liens and other creditor’s interests are considered. (Example: If a vehicle valued at $30,000 has a balance of $20,000 due on the loan, there is $10,000 of equity.)
Lien: The right to take and hold or sell the property of a debtor as security or payment for a debt or obligation.
Plan: A debtor's detailed description of how the debtor proposes to pay creditors' claims over a fixed period of time.
Priority debt: An unsecured claim that is entitled to be paid ahead of other unsecured claims that are not entitled to priority status. Priority refers to the order in which these unsecured claims are to be paid. Some examples of priority debt are alimony, maintenance, child support, and some taxes. Priority debts are not dischargeable.
Reaffirmation agreement: An agreement by a chapter 7 debtor to continue paying a dischargeable debt (such as an auto loan) after the bankruptcy, usually for the purpose of keeping collateral (i.e., the vehicle) that would otherwise be subject to repossession.
Secured debt: debt backed by a mortgage, pledge of collateral or other lien. It is debt for which the creditor has the right to pursue specific pledged property if the person who entered into the loan doesn’t make all required payments.
Trustee v. Judge: an agent of the court who manages the property of the debtor for the benefit of the creditors. The Judge appoints a trustee in most Chapter 7 cases and in Chapter 11 cases when it determines that the debtor's management should not remain in their control. This type of trustee should be distinguished from the U.S. Trustee, who plays an administrative role in all bankruptcy cases.
Unsecured debt: a claim or debt for which a creditor holds no special assurance of payment; a debt for which credit was extended based solely upon the creditor’s assessment of the debtor’s future ability to pay.
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Please note that these definitions are not exhaustive and that bankruptcy law is complex and best handled by experienced bankruptcy attorneys. These definitions are meant solely to aid the conversation between our clients and ourselves and are not meant as a legal treatise on this subject.