If you are considering filing for bankruptcy, it is important that you familiarize yourself with the procedure as well as the complex vocabulary involved in the process. There are many terms that are unfamiliar to the average layperson or which use familiar words in highly specific ways, creating a potentially confusing situation.
Basic Terms in the Vocabulary of Bankruptcy
- Bankruptcy – Bankruptcy is a legal procedure handled by federal courts. It is a complicated process that may take several months to complete. Its purpose is to help people or businesses that are unable to make payments on large amounts of debt while also in some degree protecting the interests of creditors.
- Chapter – Refers to the chapter of the United States Bankruptcy Code under which a particular case is evaluated. Typically Chapter 7, Chapter 11, or Chapter 13 will be chosen, and each differently affects the discharge of debts.
- Means Test – The Means Test is a fairly recent addition to the Bankruptcy Code and is intended to prevent individuals from filing for Chapter 7 bankruptcy protection when they have the financial resources to pay their debts under Chapter 13.
- Petition – The document filed by a creditor or debtor to begin the bankruptcy process.
- Trustee – A government employee responsible for overseeing your bankruptcy estate.
- Dischargeable debts – Forms of debts that may be eliminated as part of a successful bankruptcy.
- Non-dischargeable debts – Debts that may not be eliminated in bankruptcy.
- Liquidation – The sale of some assets and property under Chapter 7 to generate funds with which to partially pay creditors
An experienced Milwaukee bankruptcy lawyer can help to advise you of your legal rights and to ensure that you fully understand the bankruptcy process, including the terminology relevant to your case. Contact the Milwaukee bankruptcy attorneys of the DeLadurantey Law Office, LLC, at 414-377-0518 for a free consultation.