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.
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 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.