Bankruptcy BASICS

Bankruptcy Terminology   S - V

SECURED CREDITOR
An individual or business holding a claim against the debtor that is secured by a lien on property of the estate or that is subject to a right of setoff.

SECURED DEBT
Debt backed by a mortgage, pledge of collateral, or other lien; debt for which the creditor has the right to pursue specific pledged property upon default.

SCHEDULES
Lists submitted by the debtor along with the petition (or shortly thereafter) showing the debtor's assets, liabilities, and other financial information. (There are official forms a debtor must use.)

STATEMENT OF FINANCIAL AFFAIRS
A series of questions the debtor must answer in writing concerning sources of income, transfers of property, lawsuits by creditors, etc. (There is an official form a debtor must use.)

STATEMENT OF INTENTION
A declaration made by a chapter 7 debtor concerning plans for dealing with consumer debts that are secured by property of the estate.

SUBSTANTIAL ABUSE
The characterization of a bankruptcy case filed by an individual whose debts are primarily consumer debts where the court finds that the granting of relief would be an abuse of chapter 7 because, for example, the debtor can pay its debts.

SUBSTANTIVE CONSOLIDATION
Putting the assets and liabilities of two or more related debtors into a single pool to pay creditors. (Courts are reluctant to allow substantive consolidation since the action must not only justify the benefit that one set of creditors receives, but also the harm that other creditors suffer as a result.)

341 MEETING
A meeting of creditors at which the debtor is questioned under oath by creditors, a trustee, examiner, or the United States trustee about his/her financial affairs.

TRANSFER
Any mode or means by which a debtor disposes of or parts with his/her property.

TRUSTEE
The representative of the bankruptcy estate who exercises statutory powers, principally for the benefit of the unsecured creditors, under the general supervision of the court and the direct supervision of the United States trustee or Bankruptcy Administrator.

TYPING SERVICE
A business not authorized to practice law that prepares bankruptcy petitions.

UNITED STATES TRUSTEE
An officer of the Justice Department responsible for supervising the administration of bankruptcy cases, estates, and trustees, monitoring plans and disclosure statements, monitoring creditors' committees, monitoring fee applications, and performing other statutory duties.

UNDERSECURED CLAIM
A debt secured by property that is worth less than the amount of the debt.

UNLAWFUL DETAINER ACTION
A lawsuit brought by a landlord against a tenant to evict the tenant from rental property--usually for non-payment of rent.

UNLIQUIDATED CLAIM
A claim for which a specific value has not been determined.

UNSCHEDULED DEBT
A debt that should have been listed by a debtor in the schedules filed with the court but was not. (Depending on the circumstances, an unscheduled debt may or may not be discharged.)

UNSECURED CLAIM
A claim or debt for which a creditor holds no special assurance of payment, such as a mortgage or lien; a debt for which credit was extended based solely upon the creditor's assessment of the debtor's future ability to pay.

VOLUNTARY TRANSFER
A transfer of a debtor's property with the debtor's consent.

SOURCES

Doran, Personal Bankruptcy and Debt Adjustment, 135-139 (1991)

Griffin, Personal Bankruptcy: What You Should Know, 145-149 (1994)