Acquaint Yourself With Bankruptcy terminology

When it comes to law, the terminology is very confusing and difficult for a layman to understand. When you are on a shaky ground with law, i.e., when you are planning to file bankruptcy, care must be taken to learn more about the exact legal English to convey the desired meaning. The 11 legal terminologies commonly used in bankruptcy cases are Adversary proceedings Arrearage Assets Assumptions Bankruptcy code Chapter 7 Chapter 11 Chapter 13 Discharge debt Means test Non-dischargeable debts

The compilation of the details of the above commonly used terms is as follows

Adversary proceedings - After filing a complaint with the court, the bankruptcy case lawsuit proceedings commence. Arrearage - The amount to be paid on secured debt obligation. Assets - Property of any kind, which is owned and processed by person, corporation estate or other entity. Assets include real and personal property, like cash, lands, securities and vehicles which have an economic value to the owner. Assume or Assumptions - A contract or lease to perform duties agreed upon. Bankruptcy code - The informal name for title 11 of the United States Code specifying the federal bankruptcy law. Chapter 7 - This chapter of the Bankruptcy Code deals with the liquidation that is the sale of a debtor’s property and the revenue generated from it is given to his creditors. Chapter 11- This chapter of the Bankruptcy Code provides a way for the debtor to reorganize his business. It is usually opted by business organizations. Discharge debt-A debt for which the Bankruptcy Code allows the debtor’s personal liability to be eliminated. Mean test - In the Section 707(b)(2) of the Bankruptcy Code which is tried on a “means test” decides whether an individual debtor’s chapter 7 filing is supposed to be an abuse of the Bankruptcy Code entail for dismissal or conversion of the case (generally to chapter 13). Abuse is supposed if the debtor’s total current monthly income over 5 years, net of certain statutorily allowed expenses is more than (i) $10,000, or (ii) 25% of the debtor’s non-priority unsecured debt, as much as that amount is at least $6,000. The debtor may rebut a supposition of abuse only by a showing of special position to that justify additional expenses or adjustments of current monthly income. Non-dischargeable debts – It is a debt that cannot be annihilated in bankruptcy. Examples include child support, debts for alimony taxes, debts for most government funded or guaranteed educational loans overpayments, debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs, and debts for restitution or a criminal fine included in a sentence on the debtor’s conviction of a crime. Certain debts, such as debts for money or property procured by false pretenses and debts for fraud or defalcation while acting in a fiduciary capacity may be declared non-dischargeable only if a creditor on time files and domineers in a non-dischargeability action.

Being informed and prepared to face the law for a debt free life is always worth the pain. So you need to do a bit of ground work and get into it to get an expert advice and guidance to understand what is happening in the proceedings of the court when the actual hearing starts.