A few weeks ago, I wrote a post dedicated to Workers’ Compensation terminology to help clarify any confusion you may have. Today, I want to do a similar post dedicated to one of Marcie Baker’s other practice areas: Chapter 7 Bankruptcy.
I have included many of the terms I think will be of importance to you and your case, but should you want to see these and more check out the linked sources below!
Automatic Stay: An injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.
Chapter 7: The chapter of the Bankruptcy Code provides for "liquidation," i.e., the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.
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 $60,000 is subject to a $30,000 mortgage, there is $30,000 of equity.)
Chapter 7 Trustee: A person appointed in a chapter 7 case to represent the interests of the bankruptcy estate and the unsecured 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.
Non-dischargeable Debt: A debt that cannot be eliminated in bankruptcy.
Fresh Start: The characterization of a debtor's status after bankruptcy, i.e., free of most debts. Giving debtors a fresh start is one purpose of the Bankruptcy Code.
Exempt Property: the property you do not have to forfeit when filing for Chapter 7 bankruptcy.
The Means Test: To be eligible to file Chapter 7 bankruptcy, you must pass the means-test. It requires borrowers to earn below a specified income. The income is based on the median income of similar household sizes. The median income is determined by the U.S. Census and is updated frequently.
Statement of Financial Affairs: A series of questions the debtor must answer in writing concerning sources of income, transfers of property, lawsuits by creditors, etc. There is an official form a debtor must use.
Reaffirmation Agreement: An agreement by a chapter 7 debtor to continue paying a dischargeable debt after the bankruptcy, usually for the purpose of keeping collateral or mortgaged property that would otherwise be subject to repossession.
Creditor: A person to whom or business to which the debtor owes money or that claims to be owed money by the debtor.
I hope that these definitions help you as you navigate your Bankruptcy claim. Should you require further clarification or would like to consult about a potential Chapter 7 Bankruptcy filing, please do not hesitate to contact our office to schedule your free consultation.
***This blog is solely for informational purposes and does not constitute legal advice. Should you have any questions regarding Chapter 7 Bankruptcy or Bankruptcy in general, please fill out our contact form to schedule your free consultation.
Sources: https://www.mow.uscourts.gov/sites/mow/files/bankterm.pdf https://www.floridalegaladvice.com/blog/florida-bankruptcy/
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