19 terms

Lesson 18: Resolving Insolvency

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Terms in this set (...)

automatic stay
an immediate suspension of any action by a creditor against the debtor including foreclosure, repossession, and eviction upon filing a bankruptcy case.
Bankruptcy
a legal proceeding during which a debtor's assets are liquidated, or business and finances are reorganized to repay creditors.
Bankruptcy Code
the federal law that establishes bankruptcy and regulates how bankruptcies are handled.
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
"BAPCPA"; a law making it harder for consumer debtors to qualify for bankruptcy and requiring that they undergo credit counseling.
Chapter 7
a court-supervised liquidation (sale) of a debtor's assets and distribution of sales proceeds to creditors.
Chapter 11
a court-supervised reorganization of an operating business to facilitate repayment of creditors and discharge of the business's liability for some debts.
Chapter 13
a court supervised reorganization of debts by a person with regular income allowing a discharge of liability for some debts.
debt management plan
DMP; an agreement by a debtor to make monthly payments to a counseling agency that pays creditors on the debtor's behalf in exchange for a reduction of the debt.
discharge
elimination of legal liability for a debt.
dischargeable debt
a class of debt that can be wiped out in a bankruptcy.
exempt property
property of a debtor which the law protects from the claims of creditors.
insolvency
a state of being unable to pay debts or meet financial obligations.
liquidation
in bankruptcy, a mandatory sale of of assets to pay debts.
non-dischargeable debt
a class of debt that cannot be wiped out in a bankruptcy.
non-exempt property
property of a debtor which may be liquidated to pay the claims of creditors.
Proof of Claim
a bankruptcy form that must be filed by a creditor indicating the amount of the debt owed to them by the debtor.
secured claim
claim of a creditor that is based on a debt secured by property that has been pledged for the debt, such as a debt secured by a mortgage.
unsecured claim
a claim of a creditor that is not based on a debt secured by collateral.
United States Trustee
representative of the U.S. Department of Justice responsible for overseeing the administration of bankruptcy cases.