- 341 Meeting (Meeting of Creditors)
- A required meeting held after a bankruptcy filing where the trustee (and any creditors who attend) ask the debtor questions under oath about the filed papers and financial affairs.
- Automatic Stay
- A court order that takes effect immediately when a bankruptcy case is filed, stopping most collection actions, lawsuits, garnishments, and repossessions temporarily. Important exceptions exist.
- Chapter 7
- A liquidation bankruptcy designed to discharge qualifying debts relatively quickly. A trustee may sell non-exempt property to pay creditors, though many debtors keep all their property.
- Chapter 13
- A reorganization bankruptcy for individuals with regular income who propose a repayment plan lasting three to five years to pay some debts and discharge others.
- Claim
- A creditor's right to payment. Claims may be secured, unsecured, or priority depending on their legal status.
- Confirmation
- A court order approving a Chapter 13 repayment plan. Until confirmed, a plan is only a proposal and is not binding.
- Creditor
- A person or business to whom the debtor owes money or an obligation.
- Current Monthly Income (CMI)
- The average monthly income the debtor receives from most sources over the six full calendar months before filing. Used in the means test.
- Debtor
- The person who files a bankruptcy case.
- Debtor Education
- A personal financial management course debtors must complete after filing to receive a discharge. Distinct from the pre-filing credit counseling course.
- Discharge
- A court order releasing the debtor from personal liability for discharged debts, meaning creditors can no longer collect them from the debtor.
- Exemptions
- Laws that allow a debtor to protect certain property from being sold to pay creditors. Exemptions vary by state and by whether a state uses federal or state exemption lists.
- Garnishment
- A legal process where a creditor takes money from a debtor's wages or bank account to satisfy a judgment.
- Judgment
- A court's final decision in a lawsuit. A creditor with a judgment may have enhanced collection rights.
- Means Test
- A calculation comparing the debtor's income to the state median income, used to determine eligibility for Chapter 7 and to help set Chapter 13 plan payments.
- Non-dischargeable Debt
- A debt that is not eliminated by bankruptcy, such as certain taxes, student loans (in most cases), and domestic support obligations.
- Priority Debt
- A debt given special treatment in bankruptcy, such as certain recent taxes and domestic support obligations. These generally must be paid in full in a Chapter 13 plan.
- Reaffirmation
- A voluntary agreement in Chapter 7 to keep paying a secured debt (like a car loan) so the debtor can keep the property. The debt survives the bankruptcy.
- Repossession
- A creditor taking back collateral (such as a vehicle) when the debtor defaults on a secured loan.
- Secured Debt
- A debt backed by collateral, such as a mortgage or car loan. The creditor may have rights to the collateral if the debt is not paid.
- Surrender
- Giving up collateral to a secured creditor in bankruptcy, which generally eliminates any remaining personal liability for the secured debt if it is discharged.
- Trustee
- An official appointed to administer a bankruptcy case, collect and sell non-exempt assets (Chapter 7) or collect plan payments (Chapter 13).
- Unsecured Debt
- A debt not backed by collateral, such as most credit cards and medical bills.
- U.S. Trustee Program
- A component of the Department of Justice that oversees the administration of bankruptcy cases and publishes means-test data.
