Ch 13: Creditor-Debtor Relations and Bankruptcy

This set of flashcards covers key vocabulary terms related to creditor-debtor relations and bankruptcy law, providing definitions for important concepts as outlined in the lecture.

Creditor

An individual or institution that extends credit by giving another entity permission to borrow money or access goods and services with the understanding that it will be paid back later.

Debtor

An individual or entity that owes money to another individual or institution.

Lien

A claim against specific property to satisfy a debt.

Mechanic’s Lien

A security interest granted to someone who provides work or improvements to a specific parcel of property.

Judgment Lien

A claim against a debtor's property arising after a judgment is made in court.

Garnishment

A legal process whereby a creditor collects a debt by seizing property of the debtor that is in the hands of a third party.

Exempted Real Property

Real property that a debtor can keep from creditors, often including the debtor's home.

Bankruptcy Trustee

A person appointed by the court to manage the debtor’s funds during bankruptcy proceedings.

Discharge

The termination of a bankruptcy debtor’s obligation to pay debts.

Petition in Bankruptcy

The document filed with a bankruptcy court to initiate bankruptcy proceedings.

Means Test

A determination of whether a consumer-debtor can afford to pay their unsecured debts.

Automatic Stay

The suspension of almost all litigation and other actions by creditors against the debtor upon filing a petition in bankruptcy.

Consumer Protection Laws

Laws designed to protect consumers from unfair or deceptive business practices.

Chapter 7 Bankruptcy

Provides for liquidation proceedings where the debtor's non-exempt assets are sold to pay creditors.

Chapter 11 Bankruptcy

Governs the reorganization of a business under bankruptcy laws.

Involuntary Bankruptcy

A situation where creditors force a debtor into bankruptcy proceedings.

Fair Debt Collection Practices Act

A federal law that limits the behavior and actions of third-party debt collectors.