Important Terms in a Chapter 7 and Chapter 13 Bankruptcy According to an Aurora Bankruptcy Attorney

Here is an important list of common bankruptcy terms and their meanings to help you in your journey toward financial freedom.
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As an experienced Aurora and Centennial bankruptcy attorney, I often see the confusion on people’s faces when certain legal bankruptcy terms are used. Here is a list of some common words associated with bankruptcy to help you better understand the process.

Glossary of Common Littleton Bankruptcy Terms

Adversary Proceeding

A lawsuit brought about by a creditor or debtor during a bankruptcy case.

Assets

All the property you own.

Automatic Stay

The procedure where a creditor must stop attempting to collect on a debt when the Chapter 7 or Chapter 13 bankruptcy is filed.

Bankruptcy Petition

The document you file which begins the bankruptcy process and opens the case with the bankruptcy court.

Chapter 7 Bankruptcy

The type of bankruptcy where debt is wiped out with no re-payment plan.

Chapter 13 Bankruptcy

The type of bankruptcy where a payment plan is required for a 3-5-year period and then the rest of the debt is wiped out.

Consumer Debt

Debt resulting from personal, family, or household purchases.

Creditor

The person or business to which you owe money.

Debtor –

The person who owes money for debts.

Discharge

The elimination of debt through the bankruptcy case.

Dischargeable Debts

The type of debts that are eliminated through bankruptcy.

Exempt –

Property that is not able to be liquidated or sold to pay off creditors. This property is able to be kept after a bankruptcy discharge.

Joint Petition

Filing one bankruptcy petition as a husband and wife together, instead of individually.

Liquidation

Selling a debtor’s property to pay towards creditors.

Means Test

Test designed to determine if a debtor makes more or less than the medium income. It helps determine which type of bankruptcy is most appropriate.

Meeting of Creditors (341 Meeting)

Meeting where the bankruptcy trustee questions the debtor regarding the validity of the bankruptcy petition. Creditors can attend the meeting, but rarely do.

Non-Dischargeable Debts

A debt that cannot be wiped out through bankruptcy.

Reaffirmation Agreement

A new agreement or contract where you forgo your bankruptcy protection for one particular debt and take on the debt again. The lender agrees not to repossess the property as long as you make regular payments.   

Secured Debt

Debt backed by collateral where the creditor has the right to pursue the collateral if you default.

Trustee

A person assigned to review the debtor’s schedules and represent the interest of the creditors in a bankruptcy case.

Unsecured Debt

Debt with no collateral as backing.

If you are ready to file for bankruptcy, contact the best bankruptcy attorney Barry Arrington at 303-205-7870 for a free consultation to begin your journey toward financial freedom.

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