Glossary of Bankruptcy Terms

Automatic Stay: An automatic court order which is supposed to stop all collection efforts against a debtor when a bankruptcy case is filed.
Bankruptcy Lawyer: An attorney handling bankruptcy cases.
Chapter 7 Bankruptcy: sometimes referred to as regular, normal, or liquidation bankruptcy.
Chapter 13 Bankruptcy: personal reorganization bankruptcy. Goal is more toward designing a repayment plan vs. liquidation.
Collateral: The property pledged as security for a debt.
Credit Score: 3 digit assessment of someone’s credit risk. Also called FICO score.
Creditor: The holder of a claim. Generally speaking, the party to whom money is owed.
Debt: an amount owed to another party.
Debtor: Generally refers to the party filing for bankruptcy. Or, in involuntary bankruptcy, the person against whom a bankruptcy case is filed.
Discharge: The “wiping clean” of certain unsecured debts at the end of a bankruptcy case.
Exempt Property: Property deemed off limits to creditors.
Foreclosure: The process by which a creditor turns encumbered property into cash.
Filing For Bankruptcy: The official process of declaring bankruptcy in order to deal with debts.
Insolvent: When a party is unable to meet debt obligations as they come due.
No Asset Case: Reported to be the most common type of bankruptcy case where the debtor doesn’t have enough assets to bother liquidating.
Personal Property: Generally refers to property of the debtor that is not real property.
Petition Date: The date when the debtor files for bankruptcy.
Property of the Estate: Anything the debtor owns on the petition date.
Real Property: Real estate.
Secured Debt: Debt where the property is pledged as collateral or where a creditor has gotten a lien against it. E.G. A mortgage is secured by a piece of real property.
Trustee: The person assigned to examine a debtor’s papers and look for property to sell for the creditors.
Unsecured Debt: Debt without any property pledged as collateral. E.G. Normal credit card debt.