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- Adversary proceeding:
- A lawsuit filed in the bankruptcy court which is related to
the debtor's bankruptcy case or the property of the debtor. The
most common adversary proceeding is to determine whether a particular debt
is discharged.
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- Automatic stay:
- Upon the filing of a bankruptcy petition, there is an automatic
injunction issued which prohibits collection activity against
the debtor, the debtor's property and possibly against co-debtors.
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- Bankruptcy Code:
- Title 11 of the United States Code governs bankruptcy proceedings.
Bankruptcy is a matter of federal law and is, with the exception
of exemptions, the same in every state. Under the supremacy clause
of the Constitution, if there is a conflict between federal bankruptcy
law and state law, federal law controls.
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- Bankruptcy estate:
- The estate is created by the filing of a petition and is comprised
of all of the property rights of the debtor as of the commencement
of the case. An individual debtor may claim certain property as
exempt, and if the exemption is valid, the property is removed
from the estate and returned to the debtor.
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- Chapter 7:
- The most common form of bankruptcy, a Chapter 7 case is a liquidation
proceeding, available to individuals, married couples, partnerships
and corporations.
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- Chapter 11:
- A reorganization proceeding primarily for business corporations
and individuals with large debts.
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- Chapter 12:
- A simplified reorganization plan for family farmers whose debts
fall within certain limits.
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- Chapter 13:
- A proceeding in which an individual debtor has a repayment
plan for debts falling below statutory levels.
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- Collateral:
- The property which is subject to a lien.
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- Confirmation:
- The court order which approves the terms of the plan in a Chapter
11, 12 or 13. The terms of the confirmed plan set forth the rights
of the debtor and his creditors.
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- Conversion:
- Cases under the Code may be converted from one chapter to another
chapter.
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- Creditor:
- The person or organization to whom the debtor owes money or
has some other form of legal obligation.
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- Debtor:
- The debtor is the person, partnership or corporation who is
the subject of a bankruptcy case.
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- Discharge:
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- The termination of the personal obligation to pay a debt.
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- Exempt Property:
- Property that is exempt is not available to pay
the claims of creditors. The debtor gets to keep exempt property
for use in making a fresh start after bankruptcy.
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- Lien:
- An interest in real or personal property which is security for
a debt. The most common form of a lien is a mortgage.
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- Personal property:
- Property that is not real property or affixed to real property,
such as cars, bank deposits, investments, household items, tools,
crops and animals.
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- Petition:
- The document that initiates a bankruptcy proceeding. Events
are frequently described as "pre-petition", happening
before the petition was filed, and "post-petition",
after the bankruptcy.
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- Property of the estate:
- The property that is not exempt and belongs to the bankruptcy
estate.
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- Reaffirm:
- A debtor in Chapter 7 may chose to reaffirm debts that would
otherwise be discharged by the bankruptcy. The debtor makes a
new obligation to pay the debt.
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- Relief from stay:
- A creditor can ask the judge to lift the automatic stay and
permit some action against the debtor or the property of the estate.
If the judge lifts the stay, the creditor may take whatever action
the court permits.
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- Schedules:
- The official forms for the bankruptcy petition have schedules
which must be completed. The schedules list the debtors assets
and liabilities, the property claimed as exempt, and the debtors
income and expenses.
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- Secured debt:
- A claim secured by a lien in the debtor's property.
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- Unsecured debt:
- A claim or debt is unsecured if there is no collateral that
is security for the debt, or if the lien has not been properly
perfected. Most consumer debt is unsecured.
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Sullivan, McBride, Hess, & Youngblood, P.C.
4 Tower Place
Albany, New York
Phone: 518.438.5364
Fax: 518.438.0348
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