All legal issues come with a whole slate of new terms, bankruptcy is no different, so we’ll help explain some of the most common ones you’ll encounter.
- 341 Meeting
A meeting between the bankruptcy filer, his/her creditors and the bankruptcy trustee so the trustee gets a better grasp of the entire situation and so either party can bring up concerns.
- Automatic Stay
An automatic stay goes into effect as soon as your bankruptcy petition is filed, it prevents creditors from taking any further actions against you.
- Discharge
At the end of your bankruptcy the court will discharge some of your debts, this means that you are no longer responsible for any payments.
- Exempt Debt
If your debts are deemed exempt then you cannot expect them to be discharged, in other words, you’re still required to pay.
- Exempt Property
Exempt property refers to your assets which the court decides do not need to be seized to pay off debts, these assets are yours to keep.
- Means Test
Before you can file a Chapter 7 bankruptcy you’ll need to pass a means test, where your income over the previous six months is evaluated and compared to a predefined state limit.
- No Asset Case
A no asset case is when a Chapter 7 bankruptcy filer doesn’t have any assets of value so nothing will be liquidated.
- Reaffirmation
Reaffirmation is where a bankruptcy court discharges your debt but you still agree that you’re responsible and commit to repayment.
- Release of a Stay
This is a petition that creditors can file asking the court to remove the automatic stay for them so they can continue to seek repayment.