Apart from the fact that bankruptcy is available in two forms, Chapter 7 and Chapter 13, you will need to know all terms that may be used all through the proceedings. It is therefore best to consult with an attorney for more information about bankruptcy so that you can file for it with full confidence. One such term is bankruptcy trustee. This can be a corporation or even an individual but must be appointed by the bankruptcy court to review your petition and liquidate property acting on behalf of your creditors. They may also oversee repayment plan and receives and disburse payments in Chapter 13 bankruptcy.
Counseling and discharge
Credit counseling is essential before filing for bankruptcy. This is provided individually or in a group by a nonprofit credit counseling agency. You will also need to complete a course on personal financial management before bankruptcy is discharged. However, in some specific situation both these requirements can be waived. ‘Discharge’ in bankruptcy means when the proceedings are completed. For Chapter 7, it is when your assets are sold to pay the creditors and for Chapter 13, it is when you complete the repayment plan.
Other terms to know
There are few other important terms to know as well. Exempt properties are those that the state law allows a debtor to keep from sale such as personal vehicle, equity in primary residence and work tools. Lien is another term which signifies the legal action taken by the creditor to ensure repayment and liquidation is the sale of non-exempt property to change it into ‘liquid’ cash to repay the creditors. Means test is another that proves you do not have the means to repay the loan and reaffirmed account signifies those that you wish to continue paying to retain the collateral that may be seized otherwise as bankruptcy proceedings.
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