If you’re thinking about filing for bankruptcy and doing a bit of research on the process, you’ve likely come across at least a few unfamiliar terms. Most people do, as the industry jargon can be confusing to anyone who isn’t a bankruptcy lawyer.
At the Law Office of Davis & Jones, we want to provide the information you need to decide if bankruptcy is right for you. To that end, we’re explaining some of the terms you may come across as you familiarize yourself with the bankruptcy process.
Automatic Stay
An injunction that goes into effect as soon as you file for bankruptcy, the automatic stay puts an immediate halt on creditor phone calls and most collection actions.
Bankruptcy Trustee
An agent of the court, the trustee manages your claim, reviewing the petition for accuracy and collecting non-exempt assets for distribution to your creditors.
Credit Counseling
A course you must complete before filing for bankruptcy, credit counseling classes offer an opportunity to explore alternative options for debt relief.
Debtor Education
One of the final steps of the bankruptcy process, the debtor education course is designed to help you learn how to make smart financial choices in the future.
Exempt Property
Also referred to as exemptions, exempt property is any asset that you can are legally allowed to protect, typically up to a certain dollar amount in value.
Means Test
The means test, which few debtors fail, uses certain financial criteria to determine if you’re eligible for a full discharge of your debts through a Chapter 7 claim.
Meeting of Creditors
The meeting of creditors or 341 meeting, which creditors rarely attend, is a hearing with the trustee where you’ll answer routine questions, assisted by your bankruptcy lawyer.
Nondischargeable Debts
Nondischargeable debts, which include past-due support payments and unpaid taxes, are debts that you’re still required to pay after bankruptcy discharge.
Secured Debts
These types of debts, which include home mortgages and vehicle loans, involve collateral or property that creditors can repossess if you fail to make payments.
Unsecured Debts
Unsecured debts, which include credit card, utility and medical bills, are not backed by collateral and are usually discharged in bankruptcy, ending your obligation to pay.
Do you need an expert explanation of another bankruptcy term? If you live in northern Utah, the Law Office of Davis & Jones, P. C., can provide you with clear answers to all of your questions.
Our legal team has decades of combined experience serving the greater Salt Lake City area, and we’re happy to help you get on the path to a brighter financial future. To schedule a free bankruptcy lawyer consultation, contact us today.