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Glossary |
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Automatic Stay |
The term automatic stay refers the hold which is
put on all collections activity upon the filing of any
bankruptcy petition. |
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Discharge |
When a bankruptcy case completed, most of the
filing person's debts are discharged. When a debt is
discharged, the debtor is no longer legally obligated to pay
that debt. |
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Trustee |
A trustee is an attorney hired by the federal
government to oversee the bankruptcy estate. In Chapter 7
cases, the trustee reviews bankruptcy petition, interviews
debtors a the Meeting of Creditors, and would be on one of the
people who could raise an objection to the bankruptcy. In
Chapter 13 cases, the trustee reviews the proposed payment
plan, distributes any money which the debtor pays into the
court amongst the creditors, and more or less oversees the
case. |
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Automobile Deficiencies |
When an automobile is repossessed, the
creditor often will sell that vehicle at auction. When this
happens, the creditor usually does not receive full value for
the vehicle. What funds the creditor does receive are applied
toward the debtor's loan. If the amount received by the
creditor from the sale of the vehicle is less than the amount
which the debtor owed on the vehicle, the creditor can still
pursue the debtor for the difference. The difference in the
amounts is called a deficiency. |
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Petition |
The petition is the actual paperwork submitted
to the court which asks the court for the discharge of the
debt and outlines the debtor's assets, income and debt. The
filing of the petition begins the bankruptcy case. |
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Summons |
A summons is a document sent out by the court
which orders a person to appear in court. |
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Garnishments |
After a creditor has receive a judgment, that
creditor may then go to the debtor's employer and ask that a
portion (up to 25% for creditors other than the IRS) of the
debtors wages be given directly to the creditor holding the
judgment. Only one creditor can garnish a person's wages at
one time. |
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Judgments |
A judgment is a court order in which a judge
finds in favor of the a creditor. The judgment basically
states that the creditor holds a valid clam against a debtor. |
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| Bankruptcy Estate |
Upon filing a bankruptcy case, all of the
assets of the debtor pass into the bankruptcy estate. The
bankruptcy estate is managed by the trustee. Under either
state or federal law, a debtor is allowed to exempt some
assets. Exempting an asset is basically removing that asset
from the bankruptcy estate and thereby retaining ownership of
that asset. |
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Meeting of Creditors |
About one month after a bankruptcy petition is
filed, a hearing is held where the debtor goes before the
trustee assigned to his case. The debtor taken an oath and
then the trustee asks the debtor questions regarding his or
her
financial circumstances. At the hearing, creditors are allowed
to ask the debtor questions as well. Usually this hearing
lasts an average of five minutes. |
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Post-Petition |
The time
from when the bankruptcy petition was filed going forward. |
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