THE BANKRUPTCY DICTIONARY AND GLOSSARY BY RICHARD MADISON

US Bankruptcy law is a confusing mix of words, phrases, rules, and procedures. This dictionary presents some of the vocabulary used in bankruptcy discussions and gives definitions and explanations that may help to understand this very confusing subject.

These are not official definitions. Some of the entries are defined differently in the Bankruptcy laws and rules. This dictionary tries to give simpler and more understandable definitions. But be warned...as soon as we differ from an official definition, there is a danger of incorrect interpretation. This dictionary can be used as a general guide to understanding...it should not be relied upon for legal precision.

Some warnings: The presentation, format, and content of this dictionary are Copyright by Richard Madison who retains all rights thereto. The author makes no warranties and assumes no liability resulting from the use of this dictionary or any of its content.

Readers may copy and reproduce an insubstantial part of this publication for personal, non-commercial use.

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Words in this type are defined in this dictionary.

Bankruptcy
The procedure under US federal law which allows a debtor to discharge or terminate (wipe out) dischargeable debts.
Chapter
A part of the Bankruptcy law. The chapters of most interest to debtors are Chapter 7 liquidation, Chapter 11 Reorganization, and Chapter 13, Wage Earner plan.
Creditor
A person or organization that is owed money. Creditors may be secured, unsecured, priority, or non-priority according to the Code.
Debtor
The person or organization filing the bankruptcy petition.
Dischargeable Debt
An amount owed to a creditor that can be terminated or wiped out in a bankruptcy proceeding. Some debts are non-dischargeable.
Liquidation
A process in the bankruptcy proceeding that takes the property and assets (with some exceptions) from the debtor, reduces the assets to cash and uses the proceeds to pay the creditors.
Non-Dischargeable Debt
An amount owed to a creditor that cannot be terminated or wiped out in a bankruptcy proceeding. Some debts are Dischargeable.
Petition
The application or paper that starts a bankruptcy proceeding . The petition contains the name, address, and other general information about the debtor. It also contains a request to the court to give the debtor the benefits of the bankruptcy laws. The petition has schedules attached to it containing the information required for the bankruptcy court. The petition must be signed by the debtor. If the debtor files the petition, it is "voluntary". If creditors file the petition, it is "involuntary".

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© Richard Madison, 2000     Last edit 20:40 6 Apr 2000
Law Office of Richard Madison