In this article, we will conclude the bankruptcy terminology piece so you will have a better understanding of these terms if you come across them in the future. The last terminology explained was non-dischargable debt.

The next term is related it is objection to discharagability, which is a trustee’s or creditors objection to the debtor’s being released from personal liability for certain discharagable debts. Common reasons include allegations that the debt to be discharged was obtained by false pretenses or that debt arose because of the debtor’s fraud while acting as a fiduciary.

The term objection to exemptions is used when a trustee’s or creditor’s attempt to claim property as exempt from liquidation by the trustee to creditors. This could be property the debtor claimed as exempt, when it did not qualify or there was equity beyond the required exemption amount. This happens more in chapter 7 cases more than any other chapters of the Bankruptcy Code.

The next term used in bankruptcy is a party in interest, who is a party that has standing to be heard by the court in a matter to be decided in the bankruptcy case. The debtor, U.S. trustee, or bankruptcy administrator, the case trustee and creditors are parties in interest for most matters.

A personal identifier is used to identify the parties, for example social security numbers, financial account numbers, dates of birth, names of minor children and home addresses (in criminal cases only).  The next term is used in a chapter 11, 12 or 13 case, which is a plan. This term is a detailed description of how the debtor proposed to pay back creditors over a certain period of time and is subject to the bankruptcy court’s approval of such plan.

Plaintiff, used when a person or business files a complaint against another person or business with the court.

A post petition transfer is a transfer of debtor’s property after the commencement of the bankruptcy case.

Preferential debt payment is any payment made to a creditor within 90 days (or insider within 1 year); prior to the bankruptcy petition being filed that gives the creditor more than the creditor would receive in a chapter 7-bankruptcy case. Priority is the Bankruptcy Code’s statutory ranking of unsecured claims that determine the order of which those claims are paid if there is not enough money to pay all unsecured claims in full, for example money owed to a trustee, or pre petition alimony or child support which must be paid before any general unsecured creditor, like a credit card or trade debt.

A priority claim is an unsecured claim that is entitled to be paid ahead of other claims that are not entitled to priority status. This refers to the priority which these unsecured
claims are paid.

Proof of Claim is another common term used in bankruptcy and is a written statement and verifying document filed by a creditor that describes the reason the debtor owes the creditor money. An official form is used for this purpose and is used in chapter 13 and asset chapter 7 cases as well as chapter 11 cases.

Property of the estate is all legal or equitable interests of the debtor in property as of the time of filing of the bankruptcy case.

Only in chapter 7 cases is a reaffirmation agreement is used. This term is an agreement by a chapter 7 debtor to continue paying on a debt that is dischargeable, for example a car loan, after the bankruptcy to keep the property that would otherwise be surrendered through the bankruptcy. In some chapter, 7 cases retain and pay is used which the debtor chooses to pay.

In the legal world not just in bankruptcy the term redact is used meaning a blacking out of personal identifiers like social security numbers, financial account numbers, dates of birth, and minor children names. This is required in bankruptcy cases and it is the responsibility of the filer, be it the attorney, or whatever party is filing the document.

Another term you will hear pertaining to a bankruptcy case is a secured creditor, which is a creditor holding a claim against the debtor who has the right to take hold or sell the property of the debtor in satisfaction of the debt owed.

This brings us to a related term secured debt. This term is a debt secured by a mortgage, pledge of collateral or other lien or a debt for which the creditor has the right to pursue specific pledged property upon default.  This includes a mortgage, automobile or tax liens.

Schedules are detailed lists filed by the debtor along with (or shortly after filing) the petition showing the debtors assets, liabilities, and other financial information. Statement of financial affairs is also part of the bankruptcy and is a series of questions the debtor is required to answer in writing concerning sources of income, transfers of property, lawsuits by creditor and others.

In chapter 7 cases, a statement if intention is required to be completed by the debtor as it pertains to the intentions of the debtor with regards to secured property of the bankruptcy estate, for example an automobile or home.

The last few terms used often in most bankruptcy cases, are trustee, which is the representative of the bankruptcy estate who exercises statutory powers for the benefit of unsecured creditors under the supervision of the bankruptcy court and direct supervision of the United States trustee or bankruptcy administrator. The trustee is an individual or corporation appointed in all chapters 7, 12, and 13 cases and some chapter 11 cases as well. Their responsibilities include reviewing the debtor’s petition and schedules and bringing actions against creditors or the debtor to recover property of the bankruptcy estate. In chapter 7 cases, the trustee liquidates property of the estate and makes distributions to creditors. Trustee in chapter 12 or 13 cases have similar duties but also have the added responsibility to oversee the debtor’s plan, receiving payments from the debtor and distributing those payments to creditors according to the approved plan.

The last term is United States trustee, which is an officer of the Justice Department responsible for supervising the administration of bankruptcy cases, estates; trustee’s and monitors plans, and disclosure statements in chapter 11 cases and performing other statutory duties. The most used terminology of the Bankruptcy Code has been explained in this and prior articles and is meant to educate you for future reference. An experienced bankruptcy attorney can always explain in more detail as it relates to your specific case so you have a clear understanding of these terms.