Call for Free Consultation 512-458-4138

Definitions:

 

bankruptcy (the dictionary project)

Arrearage
The amount of overdue payments you owe, usually related to past due mortgages, auto payments or child support.

Accelerate
To make the entire balance of the loan due.

Bankruptcy
Bankruptcy is a federal court process designed to help consumers and businesses eliminate, reorganize or repay debts under the protection of the bankruptcy court.

Collateral
Property owned by the debtor which is subject to a lien or used to secure a debt and which the lender may repossess or foreclose to satisfy the debt if the payments are not made.

Confirmation
The order entered by a Bankruptcy Judge approving a Debtor’s plan of reorganization. The confirmation order dictates how creditors will be treated in the Chapter 13.

Creditor
Is an entity that has a claim against the debtor that arose before the filing of the bankruptcy petition. Example Before filing bankruptcy the creditor repoed and sold your truck.

Debtor
A person or entity that has borrowed money from an individual or entity and is liable on that debt.

Deficiency
The difference between the amount owed on a loan and the total amount received/collected after the sale of the collateral. Example You owe $15,000 on a car. The bank repossesses the car and then sells the car at auction for $5,000. The bank will then want to collect the deficiency of $10,000.00 from you.

341 meeting of creditors
The hearing during which the Trustee questions you about your schedules and Creditors may come an ask you questions.

Discharge
The order of the bankruptcy court which eliminates debtor(s)’ eligible debts. Creditors are prohibited from attempting to collect on debts which have been discharged.

Equity
An individual’s interest in property. Equity is the difference in the value on secured property and the amount owed on it.

Exempt Property
Property which is protected either by state law or by the bankruptcy code. This property cannot be sold by the Trustee to satisfy debts. It may include certain amounts of equity in your house, vehicles, household goods, and retirement plans.

Foreclosure
The legal process by which a lien holder creditor may take your house.

Garnishment or Wage Garnishment
The process by which a creditor takes payments out of a person’s paycheck or bank account. In Texas usually only for child support, student loans or taxes out of wages, but exceptions do occur. Judgment creditors and creditors secured on bank accounts can garnish or offset funds in bank accounts.

Judgment
The resolution of a lawsuit whereby the Court may enter a judgment against a debtor by a creditor. This means the creditor may pursue collection remedies to satisfy or collect on it’s judgment. These remedies may include garnishment, repossession, foreclosure or taking of non-exempt property. Secured creditors do not always have to obtain a judgment before foreclosing or repossessing collateral.

Levy
Similar to a garnishment. The process by which a taxing authority collects debts by attaching a person’s paycheck or bank account.

Lien
The legal process of securing collateral by allowing a creditor the right to foreclose or repossess collateral for which the creditor has been granted a security interest. Examples include liens on vehicles, homesteads, furniture and appliances.

Payday Loans
A payday loan (also called a payday advance) is a small, short-term unsecured loan, “regardless of whether repayment of loans is linked to a borrower’s payday. Interest rates routinely exceed 80% interest.

Reaffirm
A contract between a debtor and a creditor in a Chapter 7 bankruptcy which allows the debtor to keep secured collateral in exchange for promising to continue to make payments to the creditor.

Redeem
The right of a debtor to offer a lump sum payment to a secured creditor to retain the secured collateral in a Chapter 7 bankruptcy.

Reverse Mortgage
A reverse mortgage is a form of equity release. It is a loan available to home owners or home buyers over 62 years old. It allows one to access a portion of the equity in one’s home. The home owner can draw the mortgage principal in a lump sum or receive monthly payments over a specified term or over their lifetime as a line of credit. Title to the property remains in the name of the homeowners.

Secured Creditor
Secured creditors normally retain the right to seize their loan collateral, even after a discharge is granted. The debtor must decide whether to keep the asset. If a debtor returns the collateral, and if a discharge is granted, in most cases, the debtor will have no further liability to the creditor. If you surrender collateral outside of bankruptcy, you may still have liability on the debt and the creditor may seek a deficiency judgment against you.

A debtor wishing to keep the asset, such as an automobile or a house may “reaffirm” the debt or redeem the property in a Chapter 7 bankruptcy. A reaffirmation is an agreement between the debtor and the creditor in which the debtor promises to pay all or a portion of the money owed in order to retain the asset. The reaffirmed debt will still be owed after the discharge. In a Chapter 13 bankruptcy, most secured debts may be reorganized.

Surrender
The right of a debtor in a Chapter 7 bankruptcy to give back secured collateral to a creditor in a Chapter 7 bankruptcy. By surrendering the collateral to the creditor in bankruptcy, the debtor satisfies the debt and cannot be pursued for a deficiency balance. Certain exceptions may apply.

Title loan
Title loan also called an auto title loan, pink slip loan or car title loan, is a type of secured loan where the borrower can use their vehicle title as collateral. Borrowers must allow a lender to place a lien on their car title and temporarily surrender the hard copy of their vehicle title, in exchange for a loan amount. When the loan is repaid, the lien is removed and the car title is returned to its owner. If the borrower defaults on their payments then the lender is liable to repossess the vehicle and sell it to repay the borrowers’ outstanding debt. Interest rates routinely run over 500%.

Unsecured Creditor
Unsecured creditors are those creditors that have no collateral securing the debt. Typical unsecured creditors are credit card companies, medical bills, payday loans, signature loans, repossession deficiencies, and judgments.

US Trustee
The United States Trustee Program is a component of the Department of Justice responsible for overseeing the administration of bankruptcy cases and private trustees under 28 U.S.C. §586 and 11 U.S.C. §101, et seq.


1000 Heritage Center Circle, Suite 102
Round Rock, Texas 78664-4463
ph: 512-458-4138
fax: 512-458-4213
info@austindebt.com
Copyright 2017 Law Office of Nels C. Hansen P.C.
All rights reserved. Disclaimer
Posted June 2015/Updated 2016