We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code.
|
About Bankruptcy
  What is Bankruptcy?
Bankruptcy is a way for individuals and business who are overwhelmed by debt to discharge their debts or reorganize their debts and start fresh. Bankruptcy is governed by the federal law found in Title 11 of the United States Code.
Bankruptcy Terminology
Secured Debt: When you made a major
purchase and are making payments to a creditor, you most likely
signed a "security agreement." After you file your
Chapter 7, you may need to make arrangements to pay these
creditors or to return the property. If the property has been
lost, stolen, sold or given away, you must explain in details the
events.
Unsecured Debt: This includes most credit
cards, medical bills, bank charges, repossession or foreclosure
balances, etc. Some creditors may exert a security interest if you
have purchased large items with a credit card.
Priority Debt:
These are unsecured debts
that are generally not dischargeable. Priority debt includes
wages, salaries and commissions you owe to employees, security
deposits and rent deposits that you hold, and certain federal,
state and local taxes and certain student loans.
Voluntary Petition: The first two pages of the
document you file with the court. This is your request to the
court for protection under the Bankruptcy Code.
Statement of Financial
Affairs: The statements you provide
to the court stating your income, your expenses, etc.
Schedules: These are the statements
you provide to the court stating your debts.
Filing Fee: The fee the court charges
to administer your bankruptcy which is paid by you at the time of
filing. Fees vary from state to state, so you should call the
Bankruptcy Court where you live to find out the exact amount.
Automatic Stay: The automatic stay is one
of the most important features of modern bankruptcy law. Under 11
USC §362, essentially all attempts to collect debts owing on the
date a petition is filed are automatically stayed. Creditors who
persist in their efforts to collect debts after a petition is
filed may be held in contempt. A creditor's only recourse is to
wait for the termination of the bankruptcy or seek relief from the
automatic stay.
§341 Meeting of
Creditors: This is a brief meeting
with the Bankruptcy Trustee who has been assigned to your case.
Your creditors are notified of the meeting and may come to the
meting to ask questions of you or of the trustee. This is an
opportunity for you to tell your creditors what you intend to do
with secured property. §341 refers to the section of the U.S.
Bankruptcy Code that requires that you meet with the trustee and
any creditors who wish to question you.
Dischargeable Debt: Most debt is dischargeable
in a Chapter 7 Bankruptcy. Exceptions include most federal, state
and local taxes due, wages and/or benefits owed to employees, most
student loans, some taxes child support, alimony/maintenance,
fines and court costs for criminal convictions, etc.
Surrender: Property that you own and
owe money on which you will give back to the creditor in exchange
for having the debt discharged. An example would be a car or other
vehicle, which you give back, but there is still a balance due.
The balance then becomes an unsecured debt and is dischargeable.
Reaffirmation: If you have property or a
credit card that you want to keep, you can reaffirm the debt with
the creditor, i.e. you agree to pay off the balance in
return for keeping the account.
Dismissal: The court may dismiss your
case and you lose all protection from your creditors. The court
may dismiss your case if you fail to attend the §341 meeting, if
you have given false or incomplete information on your paperwork,
or if you fail to provide the documents that the Bankruptcy
Trustee requests. Your case can be Voluntarily Dismissed by you if
your circumstances change.
Discharge: This is the final step,
where the court finalizes your bankruptcy, your debts are
discharged and you're ready to begin your Fresh Start.
Disposable Income: Income received by the
debtor and spouse that is not reasonably necessary for the support
of the debtor, debtor's spouse and the debtor's dependents.
Lien Avoidance: Creditors who have a valid
lien on estate property are holders of secured claims who must be
satisfied up front and do not share pro rata with other creditors.
The debtor's ability to avoid a lien is when the lien is a
judicial lien or a nonpossessory, nonpurchase money security
interest of a specified type impairs an exemption. The trustee may
under certain circumstances be able to avoid a lien. See BRA
§522(f). A proceeding by a debtor to avoid a lien under section
522(f) requires a court to determine, but is done on motion and
does not require a full-blown adversarial action. BR 4003(d).
|
|
