The bankruptcy process can be daunting, but I have defined some of the most common terms to help you understand:
341 Meeting
This is simply a meeting of creditors. The meeting is not held in a courtroom, nor in front of a judge. During this meeting, you will be asked a series of simple questions from the Trustee.
Trustee
A person who conducts the 341 meeting and represents unsecured creditor interests.
Automatic Stay
The suspension of all attempts to collect any debts, this includes foreclosure, phone calls, automatic withdrawal of payments (even to secured creditors), shut offs, garnishments, etc. The automatic stay is automatically set in place when your bankruptcy is filed and continues upon the successful completion of your bankruptcy case.
Secured Creditors
Creditors who hold an interest in property. Example: The bank holds a loan on your house or vehicle.
Unsecured Creditors
Creditors who have no property interest in your assets. Examples: Most credit cards and medical bills.
Adversary proceeding
A lawsuit that has risen out of the bankruptcy.
Discharge
Release of a debtor from all liability for certain debts. The discharge also prohibits creditors from communicating with the debtor regarding the debt, including telephone calls, letters and personal contact following completion of the bankruptcy case.
Exemptions
Protection for your assets.
Liquidation
A sale of a debtor's property with the proceeds to be used for the benefit of creditors.
Non-dischargeable debt
A debt that cannot be eliminated in bankruptcy. Debts for alimony or child support, certain taxes, debts for most government-funded guaranteed educational loans or benefit overpayment.
Reaffirmation Agreement
Agreement by a Chapter 7 debtor to continue paying a dischargeable debt after the bankruptcy, usually for the purpose of keeping the asset. Example: Auto loan
