A – D | E – L | M – P | R – V

A – D

A

adversary proceeding: A lawsuit arising in or related to a bankruptcy case that is commenced by filing a complaint with the court. A nonexclusive list of adversary proceedings is set forth in Fed. R. Bankr. P. 7001.

arrearage:  The amount by which one is past due on a secured debt obligation.  For example, if your mortgage payment is $2,000 per month and you are three months behind, your are $6,000 in arrears.

assets:  anything, in any form, that a debtor owns. This includes tangible assets such as real estate, cars, and jewelry, as well as intangible assets, such as business goodwill, the right to sue someone, stock options, or future interests in a will.

assume or assumption:  An agreement to continue performing duties under a contract or lease.

automatic stay: An injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.

avoidance:  the ability to remove a lien.  The bankruptcy code allows certain types of liens to be avoided, such as judgment liens if they impair an exemption claimed in the bankruptcy case.

avoidance powers:  rights to recover certain transfers of property such as preferences or fraudulent transfers, or to void liens created prior to filing a bankruptcy case.

 B
bankruptcy: A legal procedure for dealing with debt problems of individuals and businesses; specifically, a case filed under one of the chapters of title 11 of the United States Code (the Bankruptcy Code).

Bankruptcy Abuse Prevention and Consumer Protection Act:  The name (mis-name) given by Congress to the new bankruptcy law legislation passed and signed into law by President GW Bush, effective October 17, 2005 which was designed to dramatically changed the way eligiblity for filing bankruptcy was determined.   It was neither designed to protect consumers nor to address actual bankruptcy abuse. 

bankruptcy-administrator: An officer of the judiciary serving in the judicial districts of 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. Compare U.S. trustee.

Bankruptcy Code:  The informal name for title 11 of the United States Code (11 U.S.C. �� 101-1330), the federal bankruptcy law.

bankruptcy court The bankruptcy judges in regular active service in each district; a unit of the district court.

bankruptcy estate: All legal or equitable interests of the debtor in property 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 United States district court who is the court official with decision-making power over federal bankruptcy cases.

bankruptcy petition:  The document filed by the debtor (in a voluntary case) or by creditors (in an involuntary case) by which opens the bankruptcy case. (There are official forms for bankruptcy petitions.)

business bankruptcy:  a case in which the majority of total debts owed are business (or, non-consumer) related.

C

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 9: The chapter of the Bankruptcy Code providing for reorganization of municipalities (which includes cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts).

chapter 11: The chapter of the Bankruptcy Code providing (generally) for reorganization, usually involving a corporation or partnership. (A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.)

chapter 12: The chapter of the Bankruptcy Code providing for adjustment of debts of a “family farmer,” or a “family fisherman” as those terms are defined in the Bankruptcy Code.

chapter 13: The chapter of the Bankruptcy Code providing for adjustment of debts of an individual with regular income. (Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.)

chapter 15: The chapter of the Bankruptcy Code dealing with cases of cross-border insolvency.

claim A creditor’s assertion of a right to payment from the debtor or the debtor’s property.

confirmation Bankruptcy judges’s approval of a plan of reorganization or liquidation in chapter 11, or payment plan in chapter 12 or 13.

consumer debtor: A debtor whose debts are primarily consumer debts. Compare business bankruptcy.

consumer debts: Debts incurred for personal, as opposed to business, needs.

contested matter: Those matters, other than objections to claims, that are disputed but are not within the definition of adversary proceeding contained in Rule 7001.

contingent claim: A claim that may be owed by the debtor under certain circumstances, e.g., where the debtor is a cosigner on another person’s loan and that person fails to pay.

creditor One to whom the debtor owes money or who claims to be owed money by the debtor.

credit counseling: Generally refers to two events in individual bankruptcy cases: (1) the “individual or group briefing” from a nonprofit budget and credit counseling agency that individual debtors must attend prior to filing under any chapter of the Bankruptcy Code; and (2) the “instructional course in personal financial management” in chapters 7 and 13 that an individual debtor must complete before a discharge is entered. There are exceptions to both requirements 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.

current monthly income The average monthly income received by the debtor over the six calendar months before commencement of the bankruptcy case, including regular contributions to household expenses from nondebtors and income from the debtor’s spouse if the petition is a joint petition, but not including social security income and certain other payments made because the debtor is the victim of certain crimes. 11 U.S.C. � 101(10A).

 D

debt:  liability on a claim

debtor:  A person who has filed a petition for relief under the Bankruptcy Code.

debtor-in-possession:  This refers to the debtor in a Chapter 11 case because the debtor usually remains in possession and control of his/her/its assets.  A debtor-in-possession has all the duties and rights of a trustee and is a fiduciary for the creditors of the estate and, therefore, owes them the highest duty of care and loyalty.  If a debtor-in-possession fails in its duties, a separate trustee can be appointed in a Chapter 11 case and take over possession of the debtor’s assets and interests.

debt relief agency: A debt relief agency is a made-up designation that our Congress created as part of the 2005 Bankruptcy Reform Act and is defined in 11 U.S.C. 101(12A). It includes “any person who provides any bankruptcy assistance to an ‘assisted person’ in return for the payment of money or other valuable consideration, or who is a bankruptcy petition preparer…”. Debt Relief Agencies are required to give certain additional disclosures and incur more costs by virtue of this designation which is neither honorary nor punitive.
defendant:  An individual (or business) against whom a lawsuit is filed.

denial of discharge:  a creditor, trustee, US Trustee or other party in interest may, pursuant to 11 USC 727,  file a complaint to deny the discharge of any debtor if certain things can be proved (such as material misstatements in the bankruptcy schedules, like omission of assets, etc.).  If successful at trial, this results in the entire discharge being denied, not just the discharge of a particular individual debt. 

discharge:  A release of a debtor from personal liability for certain dischargeable debts set forth in the Bankruptcy Code. (A discharge releases a debtor from personal liability for certain debts known as dischargeable debts and prevents the creditors owed those debts from taking any action against the debtor to collect the debts. The discharge also prohibits creditors from communicating with the debtor regarding the debt, including telephone calls, letters, and personal contact.)

dischargeable debt:  A debt for which the Bankruptcy Code allows the debtor’s personal liability to be eliminated.  More on which debts can be discharged.

disclosure statement:  A written document prepared by the chapter 11 debtor or other plan proponent that is designed to provide “adequate information” to creditors to enable them to evaluate the chapter 11 plan of reorganization.

dismissal: the termination of a case without either entry of a discharge or a denial of discharge.  After dismissal, the debtor and creditors have the same rights and remedies as they had prior to the case being commenced–as if the case had never been filed (almost).

disposable income:  In general, this is any income left over each month after you pay all your necessary monthly expenses.  However, for Chapter 13 bankruptcy purposes, Congress has re-defined this to mean your current monthly income (as that term is defined, above) less allowed expenses according to IRS standards. 

domestic support obligation:  debts owed for alimony, maintenance or support to a child, spouse or other entity for support or maintenance of a child or spouse.