Legal terms may be confusing. Especially, bankruptcy terms, which are usually a set of unique words based in debtor-creditor law historically, as well as federal law currently in 2021.
The following is a list of important bankruptcy terms that will help anyone considering bankruptcy better understand the process.
*Automatic Stay
An injunction that automatically stops lawsuits, garnishments, foreclosure, and all other collection activities against the debtor the moment a bankruptcy petition is filed.
*Bankruptcy Estate
All legal or equitable interests of the debtor in property, both real and personal, at the time of the bankruptcy filing. This estate includes all property in which the debtor has an interest, even if it is owned or held by another person)
*Discharge
A release of a debtor from personal liability for certain dischargeable debts. A discharge releases a debtor from personal liability for certain debts known as dischargeable debts and prevents the creditors of these debts from taking any action against the debtor or the debtor’s property to collect them. The discharge also prohibits creditors from communicating with the debtor regarding the debt, including telephone calls, letters, and any personal contact.
*Exempt Property
Property or value in property that a debtor is allowed to retain, free from the claims of creditors who do not have liens.
*Fresh Start
The characterization of a debtor’s status after bankruptcy when the debtor is free of most debts. One of the primary purposes of the Bankruptcy Code is to give debtors a fresh start.
*Means Test
This involves a calculation to determine whether an individual debtor’s chapter 7 filing is presumed to be an abuse of the Bankruptcy Code. IF so, it would require dismissal or conversion of the case to Chapter 13. Abuse is presumed if the debtor’s total current monthly income over 5 years is above the state median income for a family of a specific size.
*Meeting of Creditors/341 Meeting
A meeting of creditors at which debtors are questioned under oath by creditors, a trustee, examiner, or the United States trustee about their financial affairs
*Motion to Lift the Automatic Stay
A request by a creditor to allow the creditor to take an action against a debtor or the debtor’s property otherwise be prohibited by the automatic stay.
*No-asset Case
A chapter 7 case where no assets are available to pay any portion of creditors’ unsecured claims.
*Priority
The Bankruptcy Code’s statutory ranking of unsecured claims determines the order in which unsecured claims will be paid if not enough money is available to pay all unsecured claims in full. An unsecured priority claim is a claim that is entitled to be paid ahead of other unsecured claims not entitled to priority status.
The Morrison Law Group strives for complete client satisfaction with the services that we provide throughout a bankruptcy case, as well as the ongoing services that we provide post-bankruptcy. Not all Utah Bankruptcy attorneys can make this statement, but the Morrison Law Group is not like other Utah bankruptcy law firms. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, Orem, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.
