Assets: Everything the debtor owns. In addition to physical property like a house or car, intangible property like stock options is included.
Automatic Stay: An injunction against debt collection is issued immediately upon filing for bankruptcy and typically lasts until the end of the proceedings.
Chapter 7: Liquidation bankruptcy. Under chapter 7, assets are sold and the proceeds are used to pay debts. This chapter is also for people without assets.
Chapter 11: Reorganization bankruptcy. Chapter 11 is commonly used by businesses.
Chapter 13: Reorganization bankruptcy. The court will order a repayment plan for individuals with the ability to repay some debts or who have debts not dischargeable in bankruptcy.
Confirmation: A court order that makes the reorganization plan binding.
Creditor: Any person or organization to whom the debtor owes money or has a legal obligation.
Discharge: The elimination of debt through bankruptcy. Some debts cannot be discharged, including student loans, child support, and tax liens.
Lien: A collateral claim against property. Mortgages and car loans are voluntary liens. Judgments and tax liens are involuntary.
Means Test: A new procedure introduced in 2005 to verify whether a person has the ability to repay debts under chapter 13 or is eligible for chapter 7.
