Bankruptcy Terminology 101

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If you are thinking about taking control of your finances and are considering bankruptcy, chances are that you are hearing a lot of terms with which you may not be familiar. While we explain all aspects of your Georgia bankruptcy proceeding and your case in plain English, rather than legal parlance, there are many terms that will come up along the way.

Some of the language you may want to familiarize yourself with includes:

  • 341 Meeting — Also known as the First Meeting of Creditors, this generally occurs within a month of filing for bankruptcy. It is a required meeting in which you will be asked, under oath, to answer questions about your finances. You can breathe a sigh of relief, though, because creditors rarely attend.

  • Automatic stay — As soon as you file for bankruptcy, the automatic stay prevents creditors from contacting you in any way and suspends actions, including foreclosure, levies or repossessions. How long the stay remains in place depends on the type of bankruptcy protection you are seeking.

  • Chapter 7 Bankruptcy — Sometimes referred to as liquidation or fresh start bankruptcy, this form of bankruptcy allows you to eliminate all or most of your unsecured debt.

  • Chapter 13 Bankruptcy — Also called wage earner bankruptcy because it allows you to reorganize your debts, keep your property and pay back what you owe over a three- to five-year period.

  • Exemptions — These are assets the value of which is wholly or partially protected from creditors. Common exemptions in Georgia include your residence, motor vehicles, most personal property, personal injury recoveries, health aids, pensions or qualified retirement accounts, tools of the trade and child or spousal support.

  • Trustee — a court-appointed agent who oversees and administers your case, conducts the 341 Meeting and liquidates non-exempt assets (if any) in a Chapter 7 bankruptcy.

To learn more about bankruptcy terminology, visit the U.S. Bankruptcy Court site.

Posted in Bankruptcy