laz
03-31-2004, 01:59 PM
Creditor — This is the person or company you owe money to because they extended credit to you.
Debtor — This is YOU. You owe debts, so you are a debtor.
Secured Debt — This is a debt you owe for an item that could be taken away from you if you don’t pay the bill. For instance, if you don’t make your house payment, the creditor (or bank) you owe can repossess your house.
Unsecured Debt — This is a debt you owe for something that CANNOT be taken away from you. For instance, anything you charge on a credit card is an “unsecured debt.” If you don’t pay the MasterCard bill this month, they cannot come and take whatever you bought with the credit card. All they can do is harass you on the telephone until you pay the bill, turn the bill over to a collection agency, or attempt to get a judgment against you (depending on the amount you owe them.)
Asset — This is something you own that has a value. An asset can be something as small as a set of carpenter’s tools, a security deposit with a landlord or utility company, your 401K plan -- all the way to your home and car. In other words, anything you own that can be converted to cash is an asset -- even if the value is only $1.00.
Real Property — Real property is considered anything that is attached to God’s green earth. A mobile home is normally not attached to the earth because it sits on wheels. Therefore, a mobile home is considered personal property unless the wheels have been removed and it physically sits on the earth.
Personal Property — Personal property is everything else you own that is not real property.
Bankruptcy Discharge — This is a notice you receive from the bankruptcy court letting you know your case is ended. A bankruptcy can end because the Trustee files a motion to either dismiss the case, convert it to another Chapter, or the Judge discharges the debts and/or approves the Chapter 13 plan of repayment or Chapter 7 filing.
Reaffirmation Agreement — This is an agreement filed with the Bankruptcy Court when you want to continue paying the debt and the creditor agrees to the payment terms. This agreement will contain the names of both parties, the total amount owed to the creditor, the interest rate, payment terms, etc. Reaffirmation Agreements are normally used for mortgages and motor vehicles so you can keep the collateral and make payments. The creditor will normally initiate the Reaffirmation Agreement when they receive a notice from the court that you want to continue paying the debt. Other creditors will bring the Reaffirmation Agreement with them to the 341 Meeting of Creditors. If you are up-to-date on your payments, most creditors will agree to a Reaffirmation Agreement. Where you may run into problems is if you are behind in payments and are financially unable to catch them up before your 341 Meeting of Creditors. Of course, this all depends on the creditor, the type of debt, value of your property and your payment history with the creditor.
Conversion — A conversion occurs when you file one Chapter of bankruptcy and convert over to another Chapter after you have filed. (Example, you file for Chapter 7 but decide to convert to Chapter 13 so you don’t lose any assets.)
Exemption — Many people are afraid to file bankruptcy because someone told them they will lose everything they own. This is not true! There are a variety of exemption allowances allowed by the Bankruptcy Court to protect the assets you own. Each state has its own set of exemption allowances. These exemptions are necessary to help you to continue living a normal life and not be stripped of everything you own. For instance, you need a house to live in, a car to drive, clothes to wear and furniture in your home to continue living a normal life. The law allows you to keep these types of items by allowing exemptions for them. When anything you own is totally exempt from the bankruptcy, no one can take it away from you because the court will rule you need that asset to maintain a normal life.
However, exemptions do not cover everything. If you have a home for example appraised at $100,000 and you owe $50,000 to the mortgage company, you will have $50,000 in equity. If your state exemption allowance is only $25,000 -- you will have $25,000 left in “unexempt” equity that may be requested by the bankruptcy court to divide between your creditors. Of course, this is only a general example, but it is given to help you understand what exemptions are and how they work.
Automatic Stay — The moment a bankruptcy is filed stamped by the clerk at the bankruptcy court, all creditor activity to collect debts, obtain judgments, or obtain your property to satisfy a debt is completely stopped and put “on hold.” This is the protection provided to you as a person or company under the Bankruptcy law in the United States.
Relief From Stay — This is a court order, requested by a creditor, who asks the court to lift the “Automatic Stay” that was immediately put in place when you filed your bankruptcy petition. If a creditor is granted a “Relief from Stay,” the debtor (you) will receive notice from the court of its existence and the bankruptcy attorney can prepare a Motion on the debtor’s behalf to request the court to remove the Relief from Stay. (Of course, there must be a lawful reason to do so.)
Trustee — This is a real “live” person that works for the Bankruptcy Court. When you attend your 341 Meeting of Creditors, you will meet the Trustee assigned to your case. He/she will review your bankruptcy petition, ask you some questions, ask questions of any creditors who may be present, and then tell you if he/she needs any additional documents from you before recommending your case for confirmation to the Judge. The Trustee is an impartial person who works for the benefit of the creditor as well as for the debtor (you).
Dismissal — Among other things, your bankruptcy case can be dismissed at any time if you fail to comply to any rules, don’t turn over asset monies that are requested by the Trustee or if you convert from one Chapter of bankruptcy to another. Your case is “discharged” if you completely pay off your Chapter 13 or when your Chapter 7 is legally finished.
Debtor — This is YOU. You owe debts, so you are a debtor.
Secured Debt — This is a debt you owe for an item that could be taken away from you if you don’t pay the bill. For instance, if you don’t make your house payment, the creditor (or bank) you owe can repossess your house.
Unsecured Debt — This is a debt you owe for something that CANNOT be taken away from you. For instance, anything you charge on a credit card is an “unsecured debt.” If you don’t pay the MasterCard bill this month, they cannot come and take whatever you bought with the credit card. All they can do is harass you on the telephone until you pay the bill, turn the bill over to a collection agency, or attempt to get a judgment against you (depending on the amount you owe them.)
Asset — This is something you own that has a value. An asset can be something as small as a set of carpenter’s tools, a security deposit with a landlord or utility company, your 401K plan -- all the way to your home and car. In other words, anything you own that can be converted to cash is an asset -- even if the value is only $1.00.
Real Property — Real property is considered anything that is attached to God’s green earth. A mobile home is normally not attached to the earth because it sits on wheels. Therefore, a mobile home is considered personal property unless the wheels have been removed and it physically sits on the earth.
Personal Property — Personal property is everything else you own that is not real property.
Bankruptcy Discharge — This is a notice you receive from the bankruptcy court letting you know your case is ended. A bankruptcy can end because the Trustee files a motion to either dismiss the case, convert it to another Chapter, or the Judge discharges the debts and/or approves the Chapter 13 plan of repayment or Chapter 7 filing.
Reaffirmation Agreement — This is an agreement filed with the Bankruptcy Court when you want to continue paying the debt and the creditor agrees to the payment terms. This agreement will contain the names of both parties, the total amount owed to the creditor, the interest rate, payment terms, etc. Reaffirmation Agreements are normally used for mortgages and motor vehicles so you can keep the collateral and make payments. The creditor will normally initiate the Reaffirmation Agreement when they receive a notice from the court that you want to continue paying the debt. Other creditors will bring the Reaffirmation Agreement with them to the 341 Meeting of Creditors. If you are up-to-date on your payments, most creditors will agree to a Reaffirmation Agreement. Where you may run into problems is if you are behind in payments and are financially unable to catch them up before your 341 Meeting of Creditors. Of course, this all depends on the creditor, the type of debt, value of your property and your payment history with the creditor.
Conversion — A conversion occurs when you file one Chapter of bankruptcy and convert over to another Chapter after you have filed. (Example, you file for Chapter 7 but decide to convert to Chapter 13 so you don’t lose any assets.)
Exemption — Many people are afraid to file bankruptcy because someone told them they will lose everything they own. This is not true! There are a variety of exemption allowances allowed by the Bankruptcy Court to protect the assets you own. Each state has its own set of exemption allowances. These exemptions are necessary to help you to continue living a normal life and not be stripped of everything you own. For instance, you need a house to live in, a car to drive, clothes to wear and furniture in your home to continue living a normal life. The law allows you to keep these types of items by allowing exemptions for them. When anything you own is totally exempt from the bankruptcy, no one can take it away from you because the court will rule you need that asset to maintain a normal life.
However, exemptions do not cover everything. If you have a home for example appraised at $100,000 and you owe $50,000 to the mortgage company, you will have $50,000 in equity. If your state exemption allowance is only $25,000 -- you will have $25,000 left in “unexempt” equity that may be requested by the bankruptcy court to divide between your creditors. Of course, this is only a general example, but it is given to help you understand what exemptions are and how they work.
Automatic Stay — The moment a bankruptcy is filed stamped by the clerk at the bankruptcy court, all creditor activity to collect debts, obtain judgments, or obtain your property to satisfy a debt is completely stopped and put “on hold.” This is the protection provided to you as a person or company under the Bankruptcy law in the United States.
Relief From Stay — This is a court order, requested by a creditor, who asks the court to lift the “Automatic Stay” that was immediately put in place when you filed your bankruptcy petition. If a creditor is granted a “Relief from Stay,” the debtor (you) will receive notice from the court of its existence and the bankruptcy attorney can prepare a Motion on the debtor’s behalf to request the court to remove the Relief from Stay. (Of course, there must be a lawful reason to do so.)
Trustee — This is a real “live” person that works for the Bankruptcy Court. When you attend your 341 Meeting of Creditors, you will meet the Trustee assigned to your case. He/she will review your bankruptcy petition, ask you some questions, ask questions of any creditors who may be present, and then tell you if he/she needs any additional documents from you before recommending your case for confirmation to the Judge. The Trustee is an impartial person who works for the benefit of the creditor as well as for the debtor (you).
Dismissal — Among other things, your bankruptcy case can be dismissed at any time if you fail to comply to any rules, don’t turn over asset monies that are requested by the Trustee or if you convert from one Chapter of bankruptcy to another. Your case is “discharged” if you completely pay off your Chapter 13 or when your Chapter 7 is legally finished.