Bankruptcy Flashcards

Bankruptcy

A legal process governed by the Federal Bankruptcy Code that allows individuals or organizations to eliminate or repay some or all debts.

Discharge

The release of a debtor from personal liability for certain debts, meaning they are no longer legally required to pay them.

Automatic Stay

An injunction that automatically halts actions by creditors to collect debts from a debtor who has declared bankruptcy.

Chapter 7

A bankruptcy chapter focusing on personal liquidation where non-exempt assets are sold to pay creditors.

Nondischargeable Debts

Debts that cannot be eliminated through bankruptcy, such as taxes, alimony, and child support.

Creditor

An individual or institution to whom money is owed.

Trustee

An individual appointed by the court to manage the debtor's estate and ensure fair distribution to creditors.

Pre-petition Assets

All property and assets the debtor owns before filing for bankruptcy.

Post-petition Assets

All property and assets the debtor earns or acquires after filing the bankruptcy petition.

Fraudulent Conveyance

A transfer of property made with the intent to deceive or defraud creditors within a certain time before the bankruptcy filing.

Preferential Transfer

A payment or transfer made by a debtor to a creditor that gives the creditor more than they would receive in bankruptcy proceedings.

Exempt Property

Assets that a debtor is allowed to keep during bankruptcy, as defined by law.

Credit Counseling

A requirement for individual debtors to receive guidance on financial management before filing for bankruptcy.

Chapter 13

A bankruptcy chapter allowing individuals to create a repayment plan to pay back all or part of their debts over three to five years.

Chapter 11

A bankruptcy chapter allowing businesses to reorganize their debts while continuing operations.

Chapter 9

A bankruptcy chapter specifically for municipalities.

Chapter 12

A bankruptcy chapter designed for family farmers to restructure their debts.