Legal term- chap 40- the law of bankruptcy

Bankruptcy abuse prevention and cosumer protection act (BAPCA)

A 2005 change in bankruptcy code that makes it more difficult for people to declare bankruptcy and that extends the time allowed between repeat bankruptcy filings.

Involuntary bankruptcy

A bankruptcy proceeding that is initiated by one or more creditors.

Voluntary bankruptcy

A bankruptcy proceeding that is initiated by the debtor.

Means test

A comparison to determine whether a debtor meets eligibility requirements to be in Chapter 7 or Chapter 13 bankruptcy.

Bankruptcy

A legal process that aims to give debtors who are overwhelmed with debt a "fresh start" and to provide a fair way of distributing a debtor's assets among all creditors.

Chapter 13 bankruptcy

A method by which an individual with regular income can pay his or her debts from future income over an extended period.

Chapter 11 bankruptcy

A method for businesses to reorganize their financial affairs, keep their assets, and remain in business.

Chapter 12 bankruptcy

A method for family farmers to adjust their financial affairs while continuing to operate their farms.

Wage earners plan

A plan for installment payments of outstanding debts under a Chapter 13 bankruptcy.

Chapter 7 bankruptcy

A proceeding designed to liquidate a debtor's property, pay off creditors, and discharge the debtor from most debts.

Discharge in bankruptcy

A release of a debtor from all debts that were provided in a bankruptcy proceeding.

Claim

A right to payment.

Automatic stay

A self-operating postponement of collection proceedings against a debtor.

Proof of claim

A signed, written statement setting forth a creditor's claim together with the basis for it.

Secured creditor

Creditors who hold mortgages and other liens.

Prorated

Divided proportionately.

Exemptions

Items of property that are exempted from bankruptcy proceedings and may be retained by the debtor.

Debtors

One who owes a debt to another.

Creditors

People to whom money is owed.

Assests

Property.

Order for relief

The acceptance of a case by a bankruptcy court.

Bankrupt

The state of a person (including a business) who is unable to pay debts as they become due.

Liquidate

Turn into cash.