May 28, 2017

Bankruptcy Terms

definition of bankruptcyBankruptcy trustee/ trustee in bankruptcy an officer of the court in whom ownership of a debtor’s property is vested for the benefit of the creditors and who administers the property for the purpose of making payments to the creditors according to the priority of their claims: as
a: the trustee in a chapter 7 or chapter 11 case who is charged with duties that include collecting the property comprising the bankruptcy estate and reducing it to money for payment of claims
b: the trustee in a chapter 12 or chapter 13 case who is charged with duties that include distributing payments made by the debtor in accordance with a confirmed plan
(called also bankruptcy trustee)

Chapter 7  of the U.S. Bankruptcy Code

Chapter 11  of the U.S. Bankruptcy Code

Chapter 13 of the U.S. Bankruptcy Code

confirmation hearing a hearing held in a bankruptcy case prior to the confirmation of a proposed bankruptcy plan

creditor a person to whom a debt is owed esp: a person to whom money or goods are due

debtor a person who owes a debt.  Note: The Bankruptcy Act of 1978 calls the person concerned in a bankruptcy case the “debtor” as opposed to the “bankrupt.”

deficiency judgment:  a judgment in favor of a creditor for the balance of a debt that is not satisfied in full by the security esp: such a judgment following the foreclosure of a mortgage. In lay terms, a deficiency results when the amount owed on a loan is more than the amount realized from the sale (or auction) or any collateral. The shortfall is the amount of the deficiency.

discharge 1: to release from an obligation: as a: to relieve of a duty under an instrument (as a contract or a negotiable instrument) also : to render (an instrument) no longer enforceable Example: a formal instrument . . . may be discharged by either cancellation or surrender; b: to release (a debtor in bankruptcy) from liability for his or her debts

discharge hearing a hearing in a bankruptcy case in which a debtor is informed that his or her discharge has been granted or is told the reasons why it has not been granted

discharge order a: the act of relieving of something that burdens or oppresses: “release”
b: something that discharges or releases, esp: a certification of or a document proving release or payment
2: the state of being discharged or released Example: a party seeking a total discharge

exemption 1: the act of exempting or state of being exempt   2: one that exempts or is exempted: as a: an amount of income exempted from taxation that may be deducted from adjusted gross income under the tax laws b: the right created by federal and state laws to exempt specified types of property from a bankruptcy estate Example: precludes the debtor from using the exemptions in the Bankruptcy Code also: a type of property that may be claimed as exempt c: “homestead exemption”

foreclosure 1: a legal proceeding that bars or extinguishes a mortgagor’s equity of redemption in mortgaged real property 2: the extinguishment (as under the provisions of Article 9 of the Uniform Commercial Code) of the rights of a debtor in personal property subject to a security interest by judicial proceedings and esp. by judicial sale

general creditor a creditor who is not secured by a lien or other security interest (called also unsecured creditor)

judgment creditor a creditor who has a money judgment entered against the debtor and may enforce the judgment (as by attachment or writ of execution)

known creditor a creditor whose potential claim is known or should be known by a debtor and who is entitled to notice of a corporate dissolution or of a date at which claims will be barred (as in bankruptcy)

lien creditor a creditor who is secured by a lien (as by attachment)

reaffirmation hearing a hearing in a bankruptcy case at which a debtor may reaffirm dischargeable debts
Note: The reaffirmation hearing and discharge hearing are usu. held simultaneously.

secured creditor a creditor who has a security interest (as a mortgage)

statutory foreclosure a foreclosure in which a mortgagee or trustee executes a power of sale given in a mortgage or deed of trust and does so in accordance with statutory provisions
(compare strict foreclosure)

strict foreclosure 1: a proceeding in which the amount due on a mortgage is determined and a period of time within which it must be paid is fixed with the understanding that in the event of the mortgagor’s default title will be vested in the mortgagee free of any right of the mortgagor to redeem (compare statutory foreclosure)
2: the acceptance by a creditor of collateral as discharge of an obligation which under the Uniform Commercial Code denies the creditor the right to a deficiency judgment
Note: Under the U.C.C.’s strict foreclosure provision, notice must be given to other parties having a security interest in the property. If one of these parties objects to the strict foreclosure, there must be a foreclosure sale instead. In some states, deficiency judgments are allowed in strict foreclosure cases as well as foreclosures by sale.

341 hearing/first meeting of creditors a hearing held pursuant to section 341 of the Bankruptcy Code at which a bankrupt debtor is required to submit to examination under oath by creditors who may also elect a trustee if one has not already been appointed

unsecured creditor “general creditor” in this entry

valuation hearing a hearing held in a bankruptcy case to determine the value of the debtor’s property in which a creditor claims a lien or security interest

*Definitions per http://dictionary.lp.findlaw.com


Chapter 13 Bankruptcy Information Bankruptcy Overview