We encourage you to reference these terms before, during and after your bankruptcy. For more specific questions, please contact one of our experienced New Jersey bankruptcy lawyers at 856.429.2449 or lperlman@newjerseybankruptcy.com.
DEBTOR:
The person or business filing for bankruptcy.
CREDITOR:
The person or business to whom the debtor owes money. Banks, credit card companies, utilities companies, are some common creditors.
SECURED CREDITOR:
Has a lien on collateral to ensure repayment of a debt. If the debt is not repaid, the secured creditor may take the collateral. Auto lenders and mortgagees are common examples of secured creditors
UNSECURED CREDITOR:
Has a right to collect money, but no collateral to secure the debt. Credit cards, medical providers, or personal loans are common examples of unsecured creditors.
ARREARS:
Money owed that should have, but has not been, paid. Overdue child support, rent, mortgage payments, or car payments are common examples of arrears.
AUTOMATIC STAY:
Protection against collection activity provided to the debtor as soon as a bankruptcy case is filed with the court. Once the stay is in place, it becomes illegal for creditors to contact, sue, or otherwise try to collect a debt from the debtor. Creditors can request the court lift the automatic stay under certain circumstances.
CHAPTER 7 BANKRUPTCY:
Also referred to as a liquidation bankruptcy. [LINK TO CHAPTER 7 PAGE HERE]
CHAPTER 13 BANKRUPTCY:
CONFIRMATION:
A Chapter 13 hearing held after the debtor, trustee, and creditors review the plan, claims, and submitted documents. At confirmation the court approves or denies the repayment plan.
TRUSTEE:
A third party, usually an attorney, appointed to administer bankruptcy cases for the benefit of creditors. Trustees investigate finances to ensure compliance with the bankruptcy code. In a Chapter 13, the trustee has primary responsibility to accept payments and distribute funds to creditors. In Chapter 7, the trustee has primary responsibility to recover and liquidate valuable assets for the benefit of creditors.
CREDIT REPORT:
A detailed report that lists a history of debts and repayment performance.
DEFAULT:
When a borrower fails to make payments towards a loan when they are due.
DISCHARGE:
A release of a debtor from personal liability for certain debts that prohibits creditors from taking any action to collect the debt.
EXEMPTIONS:
Certain property owned by an individual that bankruptcy law protects from liquidation.
EVICTION:
Legal process where a tenant is forced out of their residence for cause.
FORECLOSURE:
Legal process by which a mortgage lender obtains ownership of real estate.
FRAUDULENT TRANSFER:
A transfer of assets for less than fair market value or with intent to defraud creditors.
GARNISHMENT:
Debt collection ordered by a court in which a portion of a person’s wage is withheld and paid to a creditor.
LEVY:
The seizure of property or money deposited in a bank in accordance with a court ordered judgment.
LIEN:
A legal interest a creditor has in collateral to secure payment of a debt. If the loan is not paid, the creditor can take the collateral.
PETITION:
The legal document that opens a bankruptcy case. When the petition is filed, the bankruptcy process begins and the automatic stay goes into effect.
PRE-PETITION:
The period of time before the bankruptcy petition is filed.
PROOF OF CLAIM:
The document that the creditor files to show how much money is owed to them. This document will also contain supporting evidence for the amount owed.
REPOSSESSION:
When a creditor takes property that was pledged as collateral for a loan.
SHERIFF’S SALE:
The forced sale of a property at public auction.
Please contact one of our experienced New Jersey bankruptcy lawyers at 856.429.2449 or lperlman@newjerseybankruptcy.com.