Bankruptcy Terms to Know
Bankruptcy – A legal process for dealing with debt problems of individuals and businesses; specifically, a case filed under one of the chapters of the United States Bankruptcy Code.
Creditor – One to whom the debtor owes money or who claims to be owed money by the debtor.
Debtor – An individual who has filed a petition for relief under the Bankruptcy Code.
Discharge – A legal release of a debtor from personal liability for specified dischargeable debts.
Dischargeable debt – A debt that can be eliminated in accordance with the Bankruptcy Code.
Exemptions – Exempt property is property owned by an individual debtor that the Bankruptcy Code or applicable state law permits the debtor to keep from unsecured creditors.
Liquidation – A sale of a debtor’s property with the proceeds to be used for repayment to creditors.
Means test – A qualification process used to determine whether an individual debtor’s chapter 7 filing is permissible.
Nondischargeable debt – A debt that cannot be eliminated in bankruptcy.
Trustee – The trustee is a private individual or corporation appointed as the representative of the bankruptcy estate.