A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
A
adversary proceeding
A lawsuit arising in or related to a bankruptcy case (listed in Federal Rule of Bankruptcy Procedure 7001) that begins by filing a complaint with the court.
assume
Generally, to take on liability or responsibility under a contract. In a bankruptcy case, an agreement by a debtor, subject to court approval, to continue to perform its obligations under certain contracts.
automatic stay
An injunction that usually comes into force automatically when a bankruptcy case is filed. This stops actions such as lawsuits, foreclosures, garnishments, and most collection activities against the debtor and property of the bankruptcy estate.
B
bankruptcy
A legal case governed primarily by title 11 of the U.S. Code (the Bankruptcy Code) — over which the federal courts have exclusive jurisdiction — by which persons or businesses unable to pay their debts can liquidate or reorganize their assets and liabilities, or seek the court’s assistance in conjunction with a foreign insolvency proceeding. Through the bankruptcy process, certain debtors may discharge their debts. Bankruptcy judges preside over these proceedings.
bankruptcy administrator
An officer of the federal judiciary serving in one of the six judicial districts in Alabama and North Carolina who, like the U.S. Trustee, is responsible for supervising the administration of bankruptcy cases, estates, and trustees; monitoring plans and disclosure statements; monitoring creditors' committees; monitoring fee applications; and performing other statutory duties. See “U.S. Trustee.”
Bankruptcy Code
The informal name for title 11 of the United States Code (11 U.S.C. §§ 101-1532) the federal bankruptcy law.
bankruptcy court
The bankruptcy judge(s) in regular active service in each district; a unit of the district court.
bankruptcy estate
All legal or equitable interests of the debtor at the time of the bankruptcy filing. The estate includes all property in which the debtor has an interest, even if it is owned or held by another person.
bankruptcy judge
A judicial officer of the U.S. district court who presides over bankruptcy cases and proceedings.
bankruptcy petition
The document filed by the debtor (in a voluntary case) or by creditors (in an involuntary case) that commences a bankruptcy case. See: Official forms for bankruptcy petitions.
C
case ancillary to a foreign proceeding
A case commenced under Chapter 15 of the Bankruptcy Code by the representative appointed by a foreign tribunal to protect the U.S. property of a debtor subject to an insolvency proceeding in another country.
Chapter 7
The chapter of the Bankruptcy Code providing for "liquidation" (i.e., the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.)
Chapter 7 trustee
A person appointed in a Chapter 7 case to represent the interests of the bankruptcy estate for the benefit of the debtor’s creditors. The trustee's responsibilities include reviewing the debtor's petition and schedules, liquidating the property of the estate, and making distributions to creditors. The trustee may also bring actions against creditors or the debtor to recover property of the bankruptcy estate.
Chapter 9
The chapter of the Bankruptcy Code providing for the adjustment of eligible municipalities’ debts (eligible municipalities may include cities and towns, as well as villages, counties, taxing districts, municipal utilities, school districts, and other subdivisions of a state).
Chapter 11
The chapter of the Bankruptcy Code under which a debtor, usually a business like a corporation or partnership, may reorganize (or less often, liquidate) under the terms of a plan that governs repayment of its debts. Individuals may also seek relief under Chapter 11.
Chapter 12
The chapter of the Bankruptcy Code providing for adjustment of debts of a "family farmer" or "family fisherman," as the terms are defined in the Bankruptcy Code.
Chapter 13
The chapter of the Bankruptcy Code providing for the adjustment of debts of an individual with regular income based on a court-approved plan. (Chapter 13 allows a debtor to keep certain property and pay debts over time, usually three to five years, as dictated by the plan.)
Chapter 13 trustee
A person appointed to administer a Chapter 13 case. A Chapter 13 trustee's responsibilities are similar to those of a Chapter 7 trustee; however, a Chapter 13 trustee has the additional responsibilities of overseeing the debtor's plan, receiving payments from debtors, and disbursing plan payments to creditors.
Chapter 15
The chapter of the Bankruptcy Code dealing with international insolvency cases.
claim
A creditor's right to payment from a debtor or the debtor's property.
collateral
Property that serves as security for the satisfaction of a debt.
confirmation
In the bankruptcy context, approval of a plan of reorganization, liquidation, or adjustment of debts by a bankruptcy judge.
consumer bankruptcy
A bankruptcy case filed to reduce or eliminate debts that are primarily consumer debts.
consumer debtor
A debtor whose debts are primarily consumer debts.
consumer debts
Debts incurred for a personal, family, or household purpose, as opposed to business needs.
contested matter
Litigation to resolve any actual dispute, other than an adversary proceeding, before the bankruptcy court. See "adversary proceeding.”
contingent claim
A claim for which the right to payment depends on the occurrence of a future event.
credit counseling
The "individual or group briefing" from an approved nonprofit budget and credit counseling agency that individual debtors must attend prior to filing under any chapter of the Bankruptcy Code. There are exceptions to this requirement for certain categories of debtors, exigent circumstances, or if the U.S. Trustee or Bankruptcy Administrator have determined that there are insufficient approved credit counseling agencies available to provide the necessary counseling. These agencies are approved by the U.S. trustee or the bankruptcy administrator. See "Financial management”.
creditor
A person to whom or business to which the debtor owes money or that claims to be owed money by the debtor.
D
debtor
A person, business, or government entity concerning which a case under the Bankruptcy Code has been filed.
defendant
In a civil case, the person or entity against whom the plaintiff brings suit; in a criminal case, the person accused of the crime.
discharge
A release of a debtor from personal liability for certain dischargeable debts. Some debts, such as certain taxes and student loans cannot be discharged. A discharge also prevents the creditors owed dischargeable debts from taking any action against the debtor or the debtor's property to collect the debts.
dischargeable debt
A debt for which the Bankruptcy Code allows the debtor's personal liability to be eliminated.
disclosure statement
A written document prepared by a Chapter 11 plan proponent that is designed to provide "adequate information" to creditors to enable them to evaluate the plan.
disposable income
Income not reasonably necessary for the maintenance or support of the debtor or dependents and certain other limited purposes.
E
equity
The value of a debtor's interest in property that remains after liens and other creditors' interests are considered. (Example: If a house valued at $100,000 is subject to a $80,000 mortgage, there is $20,000 of equity.)
executory contract
A contract under which both parties have material duties remaining to be performed. If a contract is executory, a debtor may assume or reject it, subject to court approval. See “assume.”
exemptions, exempt property
Certain property owned by an individual debtor that the Bankruptcy Code or applicable state law permits the debtor to keep from unsecured creditors. For example, in some states the debtor may be able to exempt all or a portion of the equity in the debtor's primary residence (homestead exemption), or some or all "tools of the trade" used by the debtor to make a living (i.e., auto tools for an auto mechanic or dental tools for a dentist). The availability and amount of property the debtor may exempt depends on the state the debtor lives in.
F
family farmer
An individual, individual and spouse, corporation, or partnership engaged in a farming operation that meets certain debt limits and other statutory criteria for filing a petition under Chapter 12 of the Bankruptcy Code.
fraudulent transfer
A transfer of a debtor's property made with intent to defraud or for which the debtor receives less than the transferred property's reasonably equivalent value.
G
H
I
insider (bankruptcy)
In bankruptcy cases, certain parties specified in section 109(31) of the Bankruptcy Code with a close relationship to the debtor such as relatives, officers, directors, and affiliates.
J
joint administration
A court-approved mechanism under which two or more cases of related debtors can be administered together for procedural purposes, as specified in Federal Rule of Bankruptcy Procedure 1015.Assuming no conflicts of interest, these separate businesses or individuals may be permitted to hire the same professionals, schedule joint hearings, file a joint plan, etc.
joint petition
One bankruptcy petition filed together by spouses.
K
L
lien
A claim or charge on property to secure payment of a debt or performance of an obligation.
liquidated claim
A creditor's claim for a fixed amount of money.
liquidation
The sale of a debtor's property with the proceeds generally used for the benefit of creditors.
M
means test
The formula used in bankruptcy cases to determine if an individual debtor would be presumptively abusing the bankruptcy process by filing a Chapter 7 case. Usually, if the debtor “fails” the test, the debtor would need to file under Chapter 13 rather than Chapter 7.
motion to lift the automatic stay
A request by a creditor to allow the creditor to take action against the debtor or the debtor's property that would otherwise be prohibited by the automatic stay.
N
no-asset case
A Chapter 7 case in which there are no non-exempt assets available to satisfy any portion of the creditors' unsecured claims.
nondischargeable debt
A debt for which the debtor’s personal liability is not allowed to be discharged in bankruptcy. Examples include debts for alimony or child support, certain taxes, debts for most government funded or guaranteed educational loans or benefit overpayments, debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs, and debts for restitution or a criminal fine included in a sentence on the debtor's conviction of a crime.
O
objection to discharge
A trustee or creditor’s objection to the debtor receiving a discharge in a bankruptcy case for one or more of the reasons set forth in section 727(a) of the Bankruptcy Code, such as concealing or destroying property of the estate, making a false oath or account in connection with the case, and refusing to obey lawful orders of the court.
objection to dischargeability
A trustee's or creditor's objection to the debtor being released from personal liability for certain dischargeable debts. Common reasons include allegations that the debt to be discharged was incurred by false pretenses or that debt arose because of the debtor's fraud while acting as a fiduciary.
objection to exemptions
A trustee's or creditor's objection to the debtor's attempt to claim certain property as exempt from being treated as property of a bankruptcy estate.
P
party in interest
A party who has standing to be heard by the court in a matter to be decided in a bankruptcy case. The debtor, U.S. Trustee or bankruptcy administrator, case trustee, and creditors are parties in interest for most matters.
petition
A formal application in writing made to a court or other official body requesting judicial action of some character. See also: “bankruptcy petition.”
petition preparer
A business not authorized to practice law that prepares bankruptcy petitions.
plaintiff
A person or entity that files a civil lawsuit.
plan
A detailed proposal by the bankruptcy plan proponent (usually the debtor) for how claims or interests of the debtor will be paid or otherwise treated if the plan is confirmed.
postpetition transfer
A transfer of property of the bankruptcy estate made after the commencement of the bankruptcy case.
prebankruptcy planning
The arrangement (or rearrangement) of a debtor's property or other circumstances before bankruptcy to allow the debtor to take maximum advantage of various Bankruptcy Code provisions.
preference
A debt payment made to a creditor in the 90-day period before a debtor files bankruptcy (or within one year if the creditor was an insider) that gives the creditor more than the creditor would receive in a Chapter 7 liquidation and may be avoided and recovered by the debtor or trustee, subject to court approval.
priority
The Bankruptcy Code's statutory ranking of unsecured claims that determines the order in which unsecured claims will be paid if there is not enough money to pay all unsecured claims in full.
priority claim
An unsecured claim that is entitled to be paid ahead of other unsecured claims that are either of lower priority or not entitled to priority status. Priority refers to the order in which these unsecured claims are to be paid.
proof of claim
A written statement describing the reason a debtor owes a creditor money, which typically sets forth the amount of money owed. (There is an official form for this purpose.)
property of the estate
All legal or equitable interests of the debtor in property as of the commencement of the case.
Q
R
reaffirmation agreement
An agreement, typically between a Chapter 7 debtor and a secured creditor, under which the debtor agrees to continue paying a dischargeable debt (such as an auto loan) after the bankruptcy, in exchange for being able to keep collateral (i.e. the car) that would otherwise be subject to repossession.
recalled judge
A retired magistrate judge, bankruptcy judge, or judge of the Court of Federal Claims may return to duty for a limited term as a “recalled” judge.
redemption
A procedure in a Chapter 7 case whereby a debtor removes a secured creditor's lien on collateral by paying the creditor the value of the property. The debtor may then retain the property.
S
schedules
Detailed lists filed by the debtor in a bankruptcy case along with (or shortly after filing) the petition showing the debtor's assets, liabilities, and other financial information. See bankruptcy forms.
section 341 meeting
The meeting of creditors and equity security holders required by Section 341 of the Bankruptcy Code at which the debtor is questioned under oath by the trustee and any other parties present, about the debtor’s financial affairs. Also called a meeting of creditors.
secured creditor
A creditor with a lien securing some or all of its claim against the debtor.
secured debt
Debt backed by a mortgage, pledge of collateral, or other lien. Examples include home mortgages, auto loans and tax liens.
small business or Subchapter V case
The Bankruptcy Code allows small business debtors to file for relief under two different special categories of Chapter 11 - small business or subchapter V. A debtor may elect either of these two options based on certain eligibility criteria. Both small business and subchapter V cases are treated differently than a traditional Chapter 11 case primarily due to accelerated deadlines and the speed with which the plan is confirmed.
statement of financial affairs
A detailed form that the debtor completes and files with the court with answers to a series of questions the debtor must answer in writing concerning sources of income, transfers of property, lawsuits by creditors, etc. View the official form.
statement of intention
A declaration made by an individual Chapter 7 debtor to inform the court and creditors of the debtor’s plans for dealing with property subject to security interests and unexpired personal property leases. View the official form.
substantive consolidation
Pooling the assets and liabilities of two or more related debtors to pay creditors under a plan. Substantive consolidation is viewed as an extraordinary remedy since the action must not only justify the benefit that one entity’s creditors would receive, but also any harm that other creditors would suffer as a result.
T
transfer
Any mode or means by which a debtor disposes of or parts with property.
trustee
In a bankruptcy case, a person appointed to represent the interests of the bankruptcy estate. The trustee’s responsibilities may include liquidating the property of the estate, making distributions to creditors, and bringing actions against creditors or the debtor to recover property of the bankruptcy estate. For information on how trustees work in different chapters, see "Bankruptcy Basics."
U
U.S. trustee
An officer of the U.S. Department of Justice responsible for supervising the administration of bankruptcy cases, estates, and trustees; monitoring plans and disclosure statements; monitoring creditors' committees; monitoring fee applications; and performing other statutory duties.
undersecured claim
A right to payment based on a debt secured by property that is worth less than the amount of the debt.
undue hardship
The legal standard for discharging most student debts in bankruptcy under section 523(a)(8) of the Bankruptcy Code.
unliquidated claim
A claim for which a specific value has not yet been determined.
unscheduled debt
A debt that should have been listed by the debtor in the schedules filed with the court in a bankruptcy case but was not. Depending on the circumstances, an unscheduled debt might not be discharged.
unsecured claim
A claim for which a creditor holds no security, such as a mortgage or lien.