Glossary

• Library: Chapter 13 Bankruptcy (Nolo) (2020 Ed.)

Glossary

341 hearing. See "meeting of creditors."

341 notice. A notice sent to the debtor and the debtor's creditors pursuant to Section 341 of the Bankruptcy Code that announces the date, time, and place for the first meeting of creditors. The 341 notice contains information about creditor deadlines, such as the last day to file objections.

342 notice. A notice a debtor receives pursuant to Section 342 of the Bankruptcy Code that explains debtor obligations and the consequences of not being honest in a bankruptcy case.

707(b) action. An action taken by the U.S. Trustee, the regular trustee, or any creditor, under authority of Section 707(b) of the Bankruptcy Code, to dismiss a debtor's Chapter 7 filing on the ground of abuse.

Abuse. Misuse of the Chapter 7 bankruptcy remedy. This term is typically applied to a Chapter 7 bankruptcy filing that should have been filed under Chapter 13 because the debtor appears to have enough disposable income to fund a Chapter 13 repayment plan.

Accounts receivable. Money or other property that one person or business owes to another for goods or services. Accounts receivable most often refer to the debts owed to a business by its customers.

Adequate protection payment. A payment or portion thereof made toward a claim secured by personal property before a Chapter 13 plan is confirmed. An adequate protection payment protects the creditor from losses due to collateral depreciation and is not refundable if the case is dismissed or converted to Chapter 7.

Administrative expenses. The trustee's fee, the debtor's attorneys' fee, and other costs of bringing a bankruptcy case that a debtor must pay in full in a Chapter 13 repayment plan. The trustee fee portion of administrative expenses is typically 10% of the debtor's total plan payments.

Administrative Office of the United States Courts. The federal government agency that issues court rules and forms to be used by the federal courts, including bankruptcy courts.

Adversary proceeding. Any lawsuit that begins with the filing of a formal complaint and formal service of process on the parties being sued. In a bankruptcy case, adversary actions are often brought to determine the dischargeability of a debt or to recover property transferred by the debtor shortly before filing for bankruptcy.

Affidavit. A written statement of facts, signed under oath in front of a notary public.

Allowed secured claim. A debt that is secured by collateral or a lien against the debtor's property, for which the creditor has filed a Proof of Claim with the bankruptcy court. The claim is secured only to the extent of the value of the property—for example, if a debtor owes $5,000 on a note for a car that is worth only $3,000, the remaining $2,000 is an unsecured claim.

Amendment. A document filed by the debtor that changes one or more documents previously filed with the court. A debtor often files an amendment because the trustee requires changes to the debtor's paperwork based on the testimony at the meeting of creditors.

Animals. An exemption category in many states. Some states specifically exempt pets or livestock and poultry. If your state simply allows you to exempt "animals," you can include livestock, poultry, or pets. Some states exempt only domestic animals, which are usually considered to be all animals except pets.

Annuity. A type of insurance policy that pays out during the life of the insured, unlike life insurance, which pays out at the insured's death. Once the insured reaches the age specified in the policy, he or she receives monthly payments until death.

Appliance. A household apparatus or machine, usually operated by electricity, gas, or propane. Examples include refrigerators, stoves, washing machines, dishwashers, vacuum cleaners, air conditioners, and toasters.

Arms and accoutrements. Arms are weapons (such as pistols, rifles, and swords); accoutrements are the furnishings of a soldier's outfit, such as a belt or pack, but not clothes or weapons.

Arms-length creditor. A creditor with whom the debtor deals in the normal course of business, as opposed to an insider (a friend, relative, or business partner).

Articles of adornment. See "jewelry."

Assessment benefits. See "stipulated insurance."

Assisted person. Any person contemplating or filing for bankruptcy who receives bankruptcy assistance, whose debts are primarily consumer debts, and whose nonexempt property is valued at less than $204,425. A person or an entity that offers help to an assisted person is called a "debt relief agency."

Automatic stay. An injunction automatically issued by the bankruptcy court when a debtor files for bankruptcy. The automatic stay prohibits most creditor collection activities, such as filing or continuing lawsuits, making written requests for payment, or notifying credit reporting bureaus of an unpaid debt.

Avails. Any amount available to the owner of an insurance policy other than the actual proceeds of the policy. Avails include dividend payments, interest, cash or surrender value (the money you'd get if you sold your policy back to the insurance company), and loan value (the amount of cash you can borrow against the policy).

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The formal name of the bankruptcy law that took effect on October 17, 2005.

Bankruptcy administrator. The official responsible for supervising the administration of bankruptcy cases, estates, and trustees in Alabama and North Carolina, where there is no U.S. Trustee.

Bankruptcy Appellate Panel. A specialized court that hears appeals of bankruptcy court decisions (available only in some regions).

Bankruptcy assistance. Information, advice, counsel, document preparation or filing, or attendance at a creditors' meeting provided to an "assisted person"; appearing in a case or proceeding on behalf of another person; or, providing legal representation.

Bankruptcy Code. The federal law that governs the creation and operation of the bankruptcy courts and establishes bankruptcy procedures. (You can find the Bankruptcy Code in Title 11 of the United States Code.)

Bankruptcy estate. All of the property you own when you file for bankruptcy, except for most pensions and educational trusts. The trustee technically takes control of your bankruptcy estate for the duration of your case.

Bankruptcy lawyer. A lawyer who specializes in bankruptcy and is licensed to practice law in the federal courts.

Bankruptcy petition preparer. Any nonlawyer who helps someone prepare a bankruptcy filing. Bankruptcy petition preparers (BPPs) are a special type of debt relief agency, regulated by the U.S. Trustee. Because they are not lawyers, BPPs can't represent anyone in bankruptcy court or provide legal advice.

Bankruptcy Petition Preparer's Notice, Declaration and Signature (Form 119). A written notice that bankruptcy petition preparers must provide to debtors who use their services. The notice explains that bankruptcy petition preparers aren't attorneys and that they are permitted to perform only certain acts, such as entering information in the bankruptcy petition and schedules under the direction of their clients.

Benefit or benevolent society benefits. See "fraternal benefit society benefits."

Building materials. Items such as lumber, brick, stone, iron, paint, and varnish used to build or improve a structure.

Burial plot. A cemetery plot.

Business bankruptcy. A bankruptcy in which the debts arise primarily from the operation of a business, including bankruptcies filed by corporations, limited liability companies, and partnerships.

Certification. The act of signing a document under penalty of perjury. (The signed document is also called a certification.)

Chapter 7 bankruptcy. A liquidation bankruptcy in which the trustee sells the debtor's nonexempt property and distributes the proceeds to the debtor's creditors. At the end of the case, the debtor receives a discharge of all remaining debts, except those that cannot legally be discharged.

Chapter 9 bankruptcy. A type of bankruptcy restricted to governmental units.

Chapter 11 bankruptcy. A type of bankruptcy intended to help businesses reorganize their debt load to remain in business. A Chapter 11 bankruptcy is typically much more expensive than a Chapter 7 or 13 bankruptcy because of the level of complexity and legal requirements involved.

Chapter 12 bankruptcy. A type of bankruptcy designed to help small farmers reorganize their debts.

Chapter 13 bankruptcy. A type of consumer bankruptcy designed to help individuals reorganize their debts and pay all or a portion of them over three to five years.

Chapter 13 plan. A document filed in a Chapter 13 bankruptcy in which the debtor shows how all of his or her projected disposable income will be used over a three- to five-year period to pay all mandatory debts—for example, back child support, taxes, and mortgage arrearages—as well as some or all unsecured, nonpriority debts, such as medical and credit card bills.

Chapter 13 Calculation of Your Disposable Income (Form 122C-2). The official bankruptcy form used in conjunction with the Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period to calculate a Chapter 13 debtor's projected disposable income. This figure determines how much the debtor must pay to unsecured creditors.

Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period (Form 122C-1). The official bankruptcy form used to calculate a Chapter 13 debtor's current monthly income and to determine how long the Chapter 13 plan must last. Used in conjunction with the Chapter 13 Calculation of Your Disposable Income.

Claim. A creditor's assertion that the bankruptcy filer owes a debt or obligation.

Clothing. As an exemption category, the everyday clothes you and your family need for work, school, household use, and protection from the elements. In many states, luxury items and furs are not included in the clothing exemption category.

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