Bankruptcy BASICS

Bankruptcy Terminology   M - R

MOTION TO LIFT THE AUTOMATIC STAY
A request by a creditor to allow the creditor to take an action against a debtor or the debtor's property that would otherwise be prohibited by the automatic stay.

NO-ASSET CASE
A chapter 7 case where there are no assets available to satisfy any portion of the creditors' unsecured claims.

NONDISCHARGEABLE DEBT
A debt that cannot be eliminated in bankruptcy.

OBJECTION TO DISCHARGE
A trustee's or creditor's objection to the debtor's being released from personal liability for certain dischargeable debts.

OBJECTION TO EXEMPTIONS
A trustee's or creditor's objection to a debtor's attempt to claim certain property as exempt, i.e., not liable for any prepetition debt of the debtor.

PARTY IN INTEREST
A party who is actually and substantially interested in the subject matter, as distinguished from one who has only a nominal on technical interest in it.

PLAN
A debtor's detailed description of how the debtor proposes to pay creditors' claims over a fixed period of time.

PLAINTIFF
A person or business that files a formal complaint with the court.

POSTPETITION TRANSFER
A transfer of a debtor's property made after the commencement of the case.

PREBANKRUPTCY PLANNING
The arrangement (or rearrangement) of a debtor's property to allow the debtor to take maximum advantage of exemptions. (Prebankruptcy planning typically includes converting nonexempt assets into exempt assets.)

PREFERENTIAL DEBT PAYMENT
A debt payment made to a creditor in the 90-day period before a debtor files bankruptcy (or within one year if the creditor was an insider) that gives the creditor more than the creditor would receive in the debtor's chapter 7 case.

PRIORITY
The Bankruptcy Code's statutory ranking of unsecured claims that determines the order in which unsecured claims will be paid if there is not enough money to pay all unsecured claims in full.

PRIORITY CLAIM
An unsecured claim that is entitled to be paid ahead of other unsecured claims that are not entitled to priority status. Priority refers to the order in which these unsecured claims are to be paid.

PROOF OF CLAIM
A written statement describing the reason a debtor owes a creditor money. (There is an official form for this purpose.)

PROPERTY OF THE ESTATE
All legal or equitable interests of the debtor in property as of the commencement of the case.

REAFFIRMATION AGREEMENT
An agreement by a chapter 7 debtor to continue paying a dischargeable debt after the bankruptcy, usually for the purpose of keeping collateral or mortgaged property that would otherwise be subject to repossession.