Bankruptcy Glossary

Bankruptcy Abuse Prevention and Reform Act of 2005

– The new bankruptcy law, also known as BAPCPA. The new bankruptcy law makes it more difficult for some debtors to file for Chapter 7 and includes very specific definitions of “abuse”.

Bankruptcy Administrator

– An official in charge of the administration of bankruptcy cases in each individual district of Alabama and North Carolina. The bankruptcy administrator maintains a panel of private trustees that handle each individual case.

Bankruptcy Assistance

– The help given to a person thinking about filing for bankruptcy or the help given in the actual bankruptcy filing.

Bankruptcy Code

– The bankruptcy laws.

Bankruptcy Estate

– The property you own at the filing of a bankruptcy case with only specific exceptions. The trustee takes control of the bankruptcy estate once the case is filed.

Burial plot

– A cemetery plot.

Certification

 – Signing a document knowing the penalty for perjury.

Chapter 7 Bankruptcy

 – Straight up bankruptcy where property is liquidated or sold to pay the debtor’s creditors, unless the property is exempted or protected from liquidation. The debtor receives a discharge on all debts that are dischargeable.

Chapter 9 Bankruptcy

 – Government uses this type of bankruptcy

Chapter 11 Bankruptcy

– Businesses use this type of bankruptcy to re-organize their debts in order to remain in business.

Chapter 12 Bankruptcy

– This type of bankruptcy is for small farmers to reorganize their debts.

Chapter 13

Bankruptcy – A 3 or 5 year bankruptcy reorganization plan for individual consumer debtors so that they can pay all or a portion of their debts.

Chapter 13 Plan

– A document filed in a chapter 13 bankruptcy case that shows how the debtor will use his or her projected disposable income to pay their debts.

Claim

– A creditor’s right to collect from the debtor on a debt or obligation of the debtor.

Co-debtor

– A person that is equally responsible to repay a debt or loan with the debtor.

Collateral

– Property that serves as security for a debt or loan. If the debt or loan is not paid, the creditor may have a right to take possession of the property so that it may be sold.

Common Law Property States

– This is the system used by most of the states in America to determine ownership of the property acquired during the marriage. These states do not use a community property system to define marital property. In common law property states like North Carolina, if a spouse buys a vehicle and places their name on the title, then the vehicle belongs solely to that spouse. In a community property state, that same vehicle would belong to both spouses.

Community Property States

– States that recognize community property are mostly in the western part of the United States. In general all the property acquired during a marriage is considered community property that belongs to both spouses and all debts taken on during the marriage are considered community debts and owed equally by both spouses, however, there are a some exceptions.

Complaint to Determine Dischargeablity

– This is like a lawsuit in bankruptcy court that asks the court to decide if a particular debt is dischargeable.

Complaint

– The document that starts a lawsuit.

Confirmation Hearing

– This is a hearing to determine whether or not a debtor’s proposed chapter 13 plan is feasible and satisfies certain legal requirements.

Confirmation

– This is a ruling or decision that approves a chapter 13 plan.

Consumer Bankruptcy

– This type of bankruptcy case involves mostly personal, family, or household debts.

Consumer Debt

– Personal, family, or household debts.

Contingent Debts

– A debt that might be owed in the future if certain things happen.

Conversion

– When one type of bankruptcy is changed into another type of bankruptcy. A chapter 13 bankruptcy may be converted into a chapter 7 bankruptcy or vice versa.

Cram Down

– Reducing a secured debt down to the replacement value of the collateral that secures the debt.

Credit Counseling

– Counseling of the debtor that analyzes whether the debtor can repay debts without having to file for bankruptcy. It can also include counseling the debtor about budgeting, credit, and financial management. Both credit counseling and financial management courses are required when filing for bankruptcy.

Creditor

– A person, company, or institution to whom money is owed. The government can be a creditor, usually because of taxes owed.

Creditor Matrix

– A list of creditors that must be filed along with the bankruptcy petition.

Creditor’s Meeting

– Also known as a 341 Meeting. A meeting of the creditors after the bankruptcy case is filed. The debtor is required to be at the meeting, but the creditors are not required to be there. The bankruptcy trustee will be there and will have an opportunity to ask the debtor questions about their property, paper work, the bankruptcy petition, and other documents relating to the case.

Current Monthly Income

– A debtor’s total gross income averaged over the six month period immediately preceding the month in which the bankruptcy petition is filed.

Debt Relief Agency

– A person or entity that gives assistance to a person in the areas of pre-bankruptcy planning or the actual filing of a bankruptcy case.

Debt

– An obligation to follow thur on a contract or lease. A liability for a claim – this can include a loan, credit, or promise to pay under a contract.

Debtor

– Someone who owes money to another person, company, institution or business.

Declaration

– An under oath written statement made without a notary public.

Default

– Failure to perform when due.

Disability Benefits

– Government benefits paid out under the disability insurance program or SSI when the claimant is unable to work because of a physical or/or mental impairment.

Discharge exceptions

– The debts that are not discharged in a bankruptcy case. The debtor will still have these debts after the bankruptcy case is over.

Discharge hearing

– A court hearing where the judge will explain the debts that are discharged, advise the debtor to stay out of debt and review reaffirmation agreements.

Discharge

– A court order that is issued at the end of a Chapter 7 or Chapter 13 case that relieves the debtor of liability for debts that are dischargeable.

Dischargeability action

– A proceeding brought by a party that is asking the court determine if a debt should be discharged.

Dischargeable Debt

– A debt that disappears at the end of the bankruptcy case – it is wiped out unless the judge says it should not be.

Dismissal

– When a court terminates a case that has already been filed.

Disposable income

– The debtor’s current monthly income minus allowable expenses. This is the amount that would be available to pay into a Chapter 13 plan.

Disputed Claim

– A claim or debt where there is a disagreement as to the validity or amount owed.

Dividend

– A payment received by a creditor from a debtor’s estate.

Domestic animal

s – Normally, all animals except pets.

Domestic support obligation

– When a person is required by a court order to pay child support or alimony to a child or spouse, or government entity.

Doubling

– When married couples file bankruptcy together, they may have the ability to double their property exemptions. State laws vary, but North Carolina does allow doubling.

Emergency

bankruptcy filing – When a bankruptcy case is filed with only the bare minimal documents such as the petition and the creditor matrix, without most of the needed schedules. Most of the time, an emergency filing is done to prevent a foreclosure. The required documents and forms must be filed in a certain number of days or the emergency bankruptcy case will be dismissed.

Equity

– The market value of an asset after liens and the costs to sell the asset have been subtracted.

Execution

– The signing of a document.

Executory contract

– A contract where at least one of the parties still has a duty to perform under the terms of the contract.

Exempt property

– The debtor’s property that is free from the claims of creditors and cannot be seized by the bankruptcy trustee. Property the debtor gets to keep in a Chapter 7 bankruptcy.

Exemptions

– The laws that keep the bankruptcy trustee from taking certain types of property from the debtor and makes the property free from the claims of creditors.

Face sheet filing

– A bankruptcy petition that is filed without schedules or with incomplete schedules. Sometimes these filings are used to delay a foreclosure.

Face sheet filing

–  A bankruptcy petition that is filed without schedules or with incomplete schedules.  Sometimes these filings are used to delay a foreclosure.

Farm tools

 – Tools used by a farmer .

Fiduciary

 –  A person that acts on behalf of another person in a situation requiring a great deal of trust, such as a guardian or executor.

Filing date

 –  The date that a bankruptcy case is filed with the court.

Fines penalties and restitution

 –  Debts that are owed to a victim or a court, usually criminal in nature, are not normally dischargeable in bankruptcy.

Foreclosure

 –   When a homeowner defaults on a mortgage and the creditor forces a sale of the property so that they can collect on the lien.

Fraud 

–  Any act, including writings, intended to mislead creditors or the bankruptcy court for the purpose financial gain.

Fraudulent transfer

 –  When the bankruptcy debtor transfers property to another person for a nominal amount in an effort to hide the property from the bankruptcy trustee, such as signing a car over to a relative to keep it out of the hands of the trustee.  Property transferred in this way can be recovered by the trustee and sold.

Fraudulently concealed assets

 –  Property of a debtor that the debtor intentionally failed to disclose in his or her bankruptcy case.

Fully secured creditor

 –  A lender that has given a loan to a debtor and collateral has been put up to secure the loan – if the debtor does not pay (defaults), the creditor has a right to take possession of the property and sell the property for the full amount of the loan.

Furnishings

 –  An exemption category that includes the items a home is furnished with  such as furniture, carpets, drapes, and fixtures.

Garnishment

 –  Where a court order tells a third person (normally an employer)to hold money of the debtor in their possession so that it can be seized to satisfy a debt owed by the debtor.  Some portion of a person’s earnings are required to be withheld by an employer for the payment of a debt.

Good faith

 –  Not having a bad motive.

Group life or group health insurance

 –  When a single insurance policy covers individuals in a group such as company employees and their dependents.

Head of household 

–  Also known as the “head of family”.  A person that supports and maintains one or more people in the same household who are closely related to the person by marriage, blood, or adoption.

Health aids

 – Things that are needed to maintain your health such as hearing aids, crutches, a wheelchair or prosthesis.

Health benefits 

–  Benefits paid for health care under  an insurance plan such as Blue Cross Blue Shield or some other insurance company.

Heirloom

 –  A special item with sentimental or monetary value passed down from generation  to generation.

Home Equity Loan

 –  A loan made to the debtor based on the amount of equity in the home.  This type of loan is secured by the home just like a regular mortgage.

Homestead 

–  Primary residence or home  for which an exemption is available.  Where the debtor lives when he or she files for bankruptcy.

Household Goods

 –  An exemption category including permanent items used in the house.  Things like bed linens, pots, pans, dinnerware, clothing, furniture, appliances, one (1) radio, one (1) television, one (1) VCR.

Impaired Class 

–  A whole class of creditors whose rights are modified under a reorganization.

Impaired Exemption 

–   When the amount of a debtor’s exemption in combination with liens is greater than the value of the property.

Implement 

–  A special exemption category that will allow a tool used in a debtor’s job to be exempted or protected in bankruptcy.

In Forma Pauperis

 –  Fees may be waived in a legal proceeding when a person is indigent.

Individual Debtor’s Statement of Intention

 –   A bankruptcy form that a debtor must file for secured debts telling the court what they intend to do with the property that secures the debt.  A debtor with a car note must tell the court whether he or she wants to keep the car, pay off the car or give the car back to the creditor.

Injunction

 –  A court order telling a person or a company not to do something.  The automatic stay preventing a creditor from attempting to collect on debt is an example of an injunction.

Insider

 –  A debtor’s relative or close business associate.

Insolvent

 –   When your debts outweigh your assets.

Intangible Property

 –   Property you cannot touch.  Written documents may provide evidence of intangible property.  A stock certificate may provide evidence of owning shares in a corporation.  The shares of stock are intangible property.

Involuntary Dismissal

 –   When the bankruptcy judge dismisses a bankruptcy case without the debtor’s consent.  Failure to follow directions, bad faith, or abuse could be reasons for an involuntary dismissal.

Involuntary Lien

 –   When a lien is placed on a debtor’s property without the consent of the debtor.  One such example would be when the IRS places a lien on the debtor’s property for failure to pay back taxes.

Ipso Facto Clause

 –  A paragraph found in a promissory note or lease that may allow a creditor or landlord to claim that the debtor is in default if they file for bankruptcy.

IRS Expenses 

–   These are figures that the IRS has published that represent average expenses, both nationally and regionally.  In a Chapter 7 case, when a debtor’s current monthly income is more than their state’s median family income, these figures are used to calculate the debtor’s average net income.  In a Chapter 13 case, when a debtor’s current monthly income is above the state’s median family income, these figures are used to calculate the debtor’s disposable income.

Joint Debtors

 –    A husband and wife that file bankruptcy together.

Joint Petition

 –   When two persons file a bankruptcy petition together, such as husband and wife.

Judgment Proof

 –   When a person does not have sufficient income and property to be seized by a creditor to enforce a money judgement.  It could be that a debtor only has a few dollars in their account or it may be that a debtor owns a house that is protected by an exemption.

Judicial Lien

 –   When a court money judgement against the debtor is recorded against the debtor’s property.    Most of the time the lien will be on real estate.

Lease

 –   A contract between the owner of property and a person wanting to use the property for a certain period of time.   Examples would include a car lease or an apartment lease.

Levy and Execution

 –   When the court orders the sheriff to seize nonexempt property of the debtor so that the property can be sold to satisfy the debtor’s debts.

Liabilities

 –   The debts of the debtor;  encumbrances or liens on the debtor’s property.

Lien Avoidance

 –   When certain types of liens are removed from certain types of property.  Liens that are not removed during the bankruptcy survive the bankruptcy even though the underlying debt may be cancelled.

Lien

 –   This is a claim against property that must be paid before title for the property can be passed.  It is possible for the claim against personal property to be collected thru repossession.  A claim against real property can be collected thru foreclosure.

Life Estate

 –   This is when a person has a right to live in a home until they die, but they do not own the home.

Life Insurance

 –   A contract or policy that allows for money to be paid to a person (beneficiary) in the event of the death of another person (the insured).  The policy matures when the insured dies.

Lifting the Stay

 –   This is when the bankruptcy court allows a creditor to continue debt collection that had previously been banned by the automatic stay order.

Liquid Assets

 – Cash or something that is easily converted into case such as a gold, bank deposits, stocks, or a money market account.

Liquidated Debt

 –  The exact amount of the debt has been set such as in a court judgment or contract.

Liquidation

 –  When the trustee sales the debtor’s assets in a Chapter 7 bankruptcy case.

Luxuries

 –   Things the bankruptcy court may decide are not appropriate purchases by the debtor.  Luxuries may include jewelry, expensive cars, vacations or frequent meals at expensive restaurants.

Mailing Matrix

 –  A list of creditors that the debtor must file with the bankruptcy petition.  The court uses the list to notify creditors of the bankruptcy.

Marital Debts

 –  Debts owned jointly by husband and wife.

Marital Property

 –  Property owned jointly by husband and wife.

Market Value

 –   What property sells for in the ordinary course of business.

Materialmen’s and Mechanics’ Liens

 –  A lien put on real estate or a vehicle for unpaid improvements.  The creditor making the improvement to the real estate or vehicle can have a lien put on the property if the creditor’s labor, services, or materials have not been compensated.

Means Test

 –  This is a formula that determines if a debtor should be allowed to file a Chapter 7 bankruptcy.  Income and expense categories are part of the formula

Median Family Income

 –  Each state has family income figures for different family sizes published by the U.S. Census Bureau.  This is an annual income figure that is used for determining whether a debtor has to pass the means test to file Chapter 7 bankruptcy.  The figure is also used to determine whether a Chapter 13 bankruptcy debtor must put forth all of his or her projected disposable income to a five year repayment plan.

Meeting of Creditors

 –  Also known as the 341 meeting.  A meeting of the creditors after the bankruptcy case is filed.  The debtor is required to be at the meeting, but the creditors are not required to be there.  The bankruptcy trustee will be there and will have an opportunity to ask the debtor questions about their property, paper work, the bankruptcy petition, and other documents relating to the case.

Modification

 –  Changes made in a Chapter 13 plan.

Mortgage 

–  A loan to purchase real estate that is secured by the real estate as collateral.

Motion to Lift Stay

 –  When the creditor asks the bankruptcy court to allow it to continue to try to collect on a debt from the debtor even though the bankruptcy case has been filed.

Motion

 –   When you ask the bankruptcy court to rule on an issue or dispute.

Motor Vehicle

 –   Car, truck, motorcycle, moped, and van.  Any self  propelled vehicle that can be used on a street or road.

Necessities

 –  Things you need in order to live such as food, clothing, shelter, and medical care.

Net Income

 –  The debtor’s income after expenses are subtracted.

Net Worth

 –  What something is worth after deducting liabilities.

Newly Discovered Creditors

 –  Creditors the debtor discovers after the bankruptcy case has been filed.

No Asset Case

 – A Chapter 7 case in which there are no assets to satisfy unsecured creditor’s claims.

Non-possessory Non-purchase Money Lien

 –   When a lien has been placed on property in the debtor’s possession so there will be collateral for a loan.   The loan is not being used to purchase the property being used as collateral.

Non-dischargeable Debt

 – Debts such as child support, student loans and some tax debts.

Nonexempt Property

 –  Property of the debtor  that is not protected by an exemption.  The trustee could sell such property and give the proceeds to unsecured creditors.

Nonpossessory Security Interest

 –  When the creditor has a security interest or lien in property that is in the possession of the debtor.

Nonpriority Debt

 –  Debts that are not required to be paid first in bankruptcy.

Nonpriority Unsecured Claim

 –  Normally, this refers to debts like credit cards and medical bills where there is no secured property and the debt is not a priority debt.

Nonpurchase Money Security Interest

 –  When a loan is secured by collateral, but the loan is not used to purchase that same collateral.

Notice of Appeal

 –  A form that must be filed to appeal a judgment or order.

Objection to discharge

 –  When the trustee or creditor files an objection to the debtor being released from personal liability for a debt.

Objection to exemptions

 –  When the trustee or creditor files an objection to the debtor’s attempt to claim certain property as exempt.

Objection

 –  When one party files a document to oppose a proposed action by the other party.

Over Secured Debt

 –  When the collateral on a debt is worth more than what the debtor owes on the debt.

PACER

 –  An online database that contains the records of bankruptcy cases.

Partially Secured Debt

 –  When the collateral on a debt is worth less than what the debtor owes on the debt.

Party in Interest

 –  A person or company that has a financial interest in the outcome of a bankruptcy case.  This could include the debtor, creditors and the trustee.

Pension 

–  A fund to provide income for the employee after retirement.

Perfect 

–  Making a security interest legally enforceable.

Personal Financial Responsibility Counseling

 –  A counseling class designed to teach a debtor how to live by a good budget.

Personal Injury Recovery

 –   Money from a lawsuit that is for physical and mental suffering.

Personal Property

 –  All property that is not real property.  Personal property could include things like cars, jewelry, bank accounts, stocks, and furniture.

Personally Identifiable Information

 –  sensitive information like social security numbers, email addresses, telephone numbers or credit card numbers.  Normally provided when obtaining products or services.

Petition

 –  The document (pleading) that starts a bankruptcy case.  Other documents known as “schedules” are attached to the  bankruptcy petition when it is filed.  The schedules support the petition in detail.

Pets

 –   An exemption category such as cats and dogs.  This refers to personal property that can be exempted (protected).

Plan 

–  The debtor’s outline or intention on how to repay debts and satisfy creditors with the  hope of the plan being approved by the court.  Normally, it refers to a “Chapter 13 Plan”.

Possessory Security

 –  When the creditor has a security interest or lien in property that is in the creditor’s possession.

Postpetition Transfer

 –  When the debtor transfers property after the bankruptcy petition is filed.

Pre-bankruptcy Planning

 –  Modification of the debtor’s property so that the debtor can get the maximum benefit from exemptions.  This normally includes converting nonexempt assets into exempt assets.

Preference

 –   A debtor’s payment made to a creditor within a certain period of time before the bankruptcy filing.  For regular commercial creditors (arms-length creditors) the time period is 3 months.  For insider creditors (friends, family, business assocates), the time period is 1 year.  Sometimes, if the bankruptcy trustee thinks that a creditor has received special treatment within these time periods, the trustee may be able to recover the preference (payment) and  divide it up for the other creditors.

Preferential Transfer

 –  This is when the debtor transfers property to a creditor immediately before filing for bankruptcy, while the debtor is unable to pay his debts, causing the creditor to receive more than he or she would have received from the bankruptcy if the transfer would not have been made.

Prepetition Counseling

 –   This refers to the credit or debt counseling the debtor receives before the bankruptcy petition is filed.  This is different than the financial management counseling that happens after the bankruptcy case is filed.

Prepetition

 –  Before the bankruptcy petition is filed.

Presumed Abuse

 –  When the debtor’s monthly income is over the family median income for the debtor’s state in a Chapter 7 bankruptcy, and the debtor has enough income to put forth a Chapter 13 plan under the means test.   If abuse is presumed, the debtor will have to show that the Chapter 7 filing is not abusive in order to go forward.

Primarily Business Debts

 –  When the majority of the debtor’s debts in dollar terms, are from operating a business.

Primarily Consumer Debts

 –  When the majority of the debtor’s debts in dollar terms, are personal or family in nature.

Priority Creditor

 –   A creditor that shows the debtor owes a priority debt.  The priority creditor will normally file a Proof of Claim showing the priority debt.

Priority Debt

 –   The type of debt that gets paid first when there is a bankruptcy estate distribution (when there .  Priority debts may include alimony, child support, administrative fees (trustee and attorney fees) and employee wages.

Projected Disposable Income

 –  This is the amount of income a debtor has left over at the end of each month, after subtracting out allowable expenses, payments on debts, and administrative expenses from their current monthly income.

Proof of Claim

 –   This is what a bankruptcy creditor files to state their right to payments from the bankruptcy estate.

Proof of Service

 –  A document signed that shows how service was made, who made it and when.

Property of the Estate

 –    All of the debtor’s property at the time of the bankruptcy filing except for pensions and educational trusts.  The trustee takes control of the estate during the bankruptcy process.

Purchase Money Loans

 –   Loans that are made to the debtor for a specific type of property and the property is used for collateral in case the debtor defaults on the loan.  Examples would include car loans and mortgages.

Purchase Money Security Interest

 –   The debtor uses the money he borrows from the creditor to purchase property and the creditor takes a security interest in that property.  Many times the creditor makes financing possible for the debtor and the trade off is that the creditor gets to have a security interest in that property.  However, the purchase money security interest must be perfected within 20 days of the debtor taking possession of the property.

Reaffirmation

 –   This is an agreement between the debtor and a creditor entered into after the bankruptcy case has been filed.  The debtor agrees to repay all or a part of the debt after the bankruptcy case is over.

Real Property

 –   This means real estate (land and buildings).  In general, this means anything attached to the earth.  It may include mobile homes depending on the circumstances, such as if the mobile home is attached to a foundation.

Reasonable Investigation

 –  Also known as “due diligence”, this refers to the bankruptcy attorney’s duty to investigate the information given by the debtor.

Redemption

 –  When a Chapter 7 debtor pays a secured creditor the replacement value of collateral in a lump sum, thereby gaining legal title to the property.

Reopen a Case

 –  This refers to opening a bankruptcy case that has been closed.  A debtor must ask the court to reopen the bankruptcy case.  Normally, you would reopen a bankruptcy case in order to add an overlooked creditor or to file a motion to avoid an overlooked lien.

Repayment Plan

 – A plan for the debtor to repay creditors some, or all of what they are owed.  If the plan is for repayment outside of bankruptcy, then this is an informal plan.  If the plan is for repayment in bankruptcy, then this is called a Chapter 13 plan.

Replacement Cost

 – The cost to replace an item considering its age and condition.

Repossession

 –  A creditor takes property that was used as collateral after the debtor defaults on the loan that is secured by the collateral.

Request to Lift the Stay

 –  A creditor’s written request that the collection activity continue after it was stopped by the bankruptcy court’s automatic stay.

Reversion

 –  The property is returned to the creditor when the debtor is unable to pay for it.

Ride Through

 –  The debtor continues paying on a debt thru bankruptcy.

Schedule A

 –  A bankruptcy form that describes all of the debtor’s real property (real estate).

Schedule B

 –  A bankruptcy form that describes all of the debtor’s personal property such as cars, trucks, furniture, jewelry and bank accounts.

Schedule C 

–  A bankruptcy form that describes all of the debtor’s property being claimed as exempt (protected) and the law that supports the exemption.

Schedule D

 –  A bankruptcy form that describes all of the debtor’s secured debts such as home mortgages and car notes.

Schedule E

 –  A bankruptcy form that describes all of the debtor’s priority debts such as taxes and back due child support.

Schedule F 

–  A bankruptcy form that describes all of the debtor’s nonpriority, unsecured debts such as medical bills and credit cards.

Schedule G

 –  A bankruptcy form that describes leases and contracts under which the debtor still has obligations.

Schedule H

 –  A bankruptcy form that describes the codebtors that might be affected by the bankruptcy.

Schedule I

 –  A bankruptcy form that describes the debtor’s income.

Schedule J 

–  A bankruptcy form that describes the debtor’s monthly expenses.

Schedules

 –   Bankruptcy forms a debtor must file describing his or her property, debts, income, and expenses.

Second Deed of Trust

 –  A second mortgage against real estate made after the original mortgage such as a home equity loan.  A second loan against real estate made after the first.

Secured Claim

 –  A debt secured by collateral in a written agreement.  Debt that is backed up by a pledge of property or collateral that gives the creditor a right to pursue the property if the debt is not paid back.  A mortgage or a lien are examples of a creditor’s secured claim.

Secured Creditor

 –  A creditor that owns a secured claim.  The secured creditor has a lien on the debtor’s property.

Secured Debt

 –  A debt that is secured by collateral (property).

Secured Interest 

–  A creditor’s interest or claim to property that is being used as collateral.

Secured Property

 –  This is property that serves as collateral for a secured debt.

Security Agreement

 –  A document that contains an agreement creating a security interest in property.

Security

 – Stocks, bonds, notes, and certificates of deposit.

Serial Bankruptcy Filing

 –  Filing one bankruptcy after another in an effort to use the protection of the court’s order of automatic stay to keep from losing secured property.

State Exemptions

 –  Laws that protect certain types of property so that creditors cannot take the property to satisfy a debt.  These laws also prevent the trustee from taking the property and selling it for the benefit of the debtor’s unsecured creditors.

Statement of Affairs

 –  An official form the debtor must file in a bankruptcy case along with his or her bankruptcy petition that shows the  debtor’s legal, economic and business transactions for several years prior to the filing.  This may include telling about gifts, income, lawsuits and other information that will allow the trustee to accurately analyze the debtor’s case.

Statement of Current Monthly Income and Disposable Income Calculation

 –  An official form the debtor must file in a Chapter 13 case along with his or her bankruptcy petition that shows the debtor’s current monthly income and analyzes the debtor’s projected disposable income to see how much will be paid to the unsecured creditors.

Statement of Current Monthly Income and Means Test Calculations

 –  An official form the debtor must file in a Chapter 7 case along with his or her bankruptcy petition that shows the debtor’s current monthly income and analyzes whether the debtor’s income is higher than the state’s median family income.  If the debtor’s income is higher than the state’s median family income then this could be considered abuse in a Chapter 7.

Statement of Intention

 – An official form the debtor must file along with his or her bankruptcy petition.  The form tells the court and secured creditors what the debtor plans to do with their secured debts:  keep the property and the debt, buy the property for a lump sum, or surrender the property and discharge the debt.

Statement of Social Security Number

 –  An official form the debtor must file along with his or her bankruptcy petition that shows the debtor’s complete Social Security number.

Statutory Lien

 –  The law imposes a lien on the property such as tax liens or mechanics’ liens.  Not voluntary liens consented to by the debtor.

Stay

 –  Also known as an “automatic stay”.  This is an order or injunction issued by the bankruptcy court after a debtor files for bankruptcy.  This order keeps most creditors from trying to collect on the debts of the debtor.

Straight up Bankruptcy

 –  Chapter 7 bankruptcy.

Stripped-Down of a Lien

 –  A lien on property is reduced to the property’s replacement value in a Chapter 13 bankruptcy.

Strong Armed Powers

 –  The Trustee’s power to reverse certain transactions by the debtor.

Student Loan

 –  A loan made for educational purposes under federal guidelines that is not normally dischargeable in bankruptcy unless the debtor can show undue hardship.

Subordination

 –  Placing in a lower rank or order.

Subrogation

 –  Substituting one part into another party’s position

Suits, Executions, Garnishments, and Attachments

 –  The types of actions creditors can take to enforce money judgments.

Summary of Shedules 

–  A form that summarizes the property and debt in a bankruptcy petition.

Surrender of Collateral

 –  Returning the property to the creditor so the underlying secured debt can be discharged in a Chapter 7 bankruptcy.

Tangible Personal Property

 –  All property that is not real property (not real estate) that you can touch such as money, cars, furniture, and jewelry.

Tangible Property

 –  All real and personal property that you can touch, such as money, houses, cars, jewelry and furniture.

Tax Lien

 –  A lien on property to secure the payment of back taxes.

Tenancy by the Entirety

 –  A husband and wife own their home together as one.

Tools of the Trade

 –  Things the debtor needs to do his or her work, such as tools for a plumber, carpenter or mechanic.

Transcript of Tax Return

 – An IRS summary of the debtor’s tax return.

Trustee

 –  A person that is appointed to handle the administrative duties associated with a bankruptcy case.  The Trustee has the power to seize and sell nonexempt property of the bankruptcy estate and pay the creditors.

Undersecured Debt

 –  A debt secured by property that is worth less than the debt.

Undue Hardship

 – What the debtor must show in order to discharge a student loan such as when the debtor has no income and there is little chance he or she will have the ability to repay the loan in the future.

Unexpired Lease

 – A lease that is not yet up.

Unliquidated Claim 

–  A debt that is in dispute.

Unmatured Life Insurance

 –  The insurance policy cannot be paid since the person insured is still alive.

Unscheduled Debt

 – A debt that is not in the bankruptcy petition.

Unsecured Creditor

 – A creditor that is owed a debt and the debt is not secured by property or collateral.

Unsecured Priority Claims

 – Priority claims that are not secured by property or collateral such as taxes or back child support.

Valuation of Property

 – Determining the replacement value of property so that the value can be used in the bankruptcy paperwork.

Voidable Preference

 –  A transfer of property that the trustee can reverse or cancel.

Voluntary Dismissal

 –  When the debtor dismisses his or her case own their own.

Voluntary Lien

 – When the debtor agrees to a lien, like a mortgage or car note.

Waiver

 –  Giving up a right, normally done in writing.

Weekly Net Earnings

 – The amount of earnings a debtor has after deducting taxes, Social Security contributions and other mandatory deductions.

Wild-Card Exemption

 – An amount a debtor can apply towards exempting any type of property.

Willful and Malicious Act 

– An act done with the intent to harm.

Willful or Malicious Act Resulting in a Civil Judgment

 – A careless or reckless act that could result in a civil judgment.

Work Out

 –  An agreement between a debtor and a creditor on how to satisfy a debt.

Wrongful Death Cause of Action

 – The right to pursue a civil judgment for compensation for having to live without a deceased person.

Wrongful  Death Recoveries

 –  The amount of money awarded in a lawsuit to a plaintiff for the loss of a deceased person.  The award may include earnings that a deceased person would have provided if they had not died.