Arrears - the part of a debt that is overdue after missing one or more required payments.
Asset – anything of value that can be converted into cash.
Automatic stay - request to freeze actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy.
Bankruptcy Code - the informal name for title 11 of the United States Code (11 U.S.C. §§ 101-1330), the federal bankruptcy law.
Bankruptcy – a legal status of a person or business that cannot repay the debts it owes to creditors. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor.
Bankruptcy Protection –the process by which a debtor is “protected” by a court from harassment by creditors while he/she reorganizes their finances.
Bankruptcy Trustee - an entity, often an individual, in charge of administering a bankruptcy estate.
Chapter (Bankruptcy) - a type of filing under Title 11 of the Federal Bankruptcy Code. There are four types of bankruptcy filings: Chapter 7, Chapter 13, Chapter 11, and Chapter 12.
Creditor - a person or company to whom money is owed.
Debt – money that is owed or due.
Debtor - a person or company who owes money.
Debtor-in-Possession - a person or corporation who has filed a bankruptcy petition, but remains in possession of property upon which a creditor has a lien or similar security interest.
Discharge – wipe out of money owed, however, only refers to debts you owed before you filed for bankruptcy.
Equity – the value of a piece of property (such as a house) after any debts that remain to be paid for it (such as the amount of a mortgage) have been subtracted.
Exemptions – property or assets that cannot be seized or sold to pay debts owed to creditors even after bankruptcy is filed.
Foreclosure – the process of taking possession of a mortgaged property as a result of the borrower’s failure to keep up with the mortgage payments.
Judgment – an opinion, decision, or a sentence given by a court of law.
Levy – charged. A tax, fee or fine is levied, or charged.
Liability (mortgage) – an item of value that is part of the overall debt or obligation of a person or business. A mortgage can be a liability of a homeowner/borrower.
Liquidation the process of selling a business or property to pay off a debt.
Litigation – the process of taking legal action.
Loan Modification – the process by which the terms of a mortgage are modified (changed) outside the original terms of the contract agreed to by the lender or borrower.
Means Test - a test for relief eligibility for debtors who have sufficient financial means to pay a portion of their debts and used by courts to determine eligibility for Chapter 7 or Chapter 13 bankruptcy.
Non-exempt Property – In a bankruptcy, a person’s possessions that can be sold by the court to pay creditors.
Petition – formal, written request
Reaffirmation – renewed intention (pledge) to do something.
Repayment Plan – A plan set up and agreed upon between a borrower and his/her creditors that specifies how the money will be paid back.
Repossession – when a financial institution takes back an object that was either used as collateral, rented or leased in a transaction
Unsecured Debt - any type of debt or general obligation that is not collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the terms for repayment.
Wage garnishment - the process of deducting money from an employee's monetary compensation (including salary), sometimes as a result of a court order. Wage garnishments continue until the entire debt is paid or arrangements are made to pay off the debt. Garnishments can be taken for any type of debt but common examples of debt that result in garnishments include: child support, defaulted student loans, taxes and unpaid court fines.
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