Chapter 10.2 231-136 flashcards

Flashcard #1
Term: Bankruptcy
Definition: A legal process that relieves debtors of the responsibility of paying their debts or protects them while they try to repay.

Flashcard #2
Term: Insolvent
Definition: Means you have insufficient income and assets to pay your debts.

Flashcard #3
Term: Voluntary bankruptcy
Definition: Occurs when a debtor files a petition with a federal court asking to be declared bankrupt.

Flashcard #4
Term: Discharged debt
Definition: Refers to previous debts erased by the court during bankruptcy proceedings.

Flashcard #5
Term: Involuntary bankruptcy
Definition: Occurs when creditors file a petition with the court, asking the court to declare the debtor bankrupt.

Flashcard #6
Term: Chapter 7
Definition: A liquidation form of bankruptcy for individuals, providing immediate debt relief.

Flashcard #7
Term: Chapter 13
Definition: A reorganization (payment plan) form of bankruptcy for individuals, allowing debtors to keep most of their property and pay a portion of their debts over three to five years.

Flashcard #8
Term: Chapter 11
Definition: A reorganization form of bankruptcy for businesses that allows them to continue operating under court supervision as they repay their restructured debts.

Flashcard #9
Term: Reaffirmation
Definition: An agreement to pay debts that have been legally discharged.

Flashcard #10
Term: Exempted property
Definition: Assets considered necessary for survival, which debtors can retain, including limited equity in a residence and interest in a vehicle.

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