Filing for bankruptcy can feel extremely stressful. On top of everything else, you’re suddenly involved in a legal proceeding where everyone else is using foreign terminology. To understand your case, your rights, and your obligations, however, you need to understand the basic terms that you will hear over and over (and over) again as your case proceeds.
Discharge – This is an order of the bankruptcy court stating that you are no longer personally responsible for any debt that you incurred before the date you filed for bankruptcy. It is the ultimate goal in filing for bankruptcy.
Automatic stay – This legal order is automatically entered by the court and effective the moment your file for bankruptcy. It prohibits creditors from taking action against you to collect a debt.
Chapter 13 bankruptcy – A form of bankruptcy where a consumer enters into a court-approved payment plan to repay the consumer’s creditors. Under Chapter 13, those who file may take as long as five years to complete the payment plan.
Chapter 7 bankruptcy – Even though this is not the subject of this post, it’s helpful to understand Chapter 7 because it is usually the only other form of bankruptcy relief for consumers. It is often referred to as a complete liquidation because the court will take control of all of your non-exempt assets, sell them to pay your creditors, and then enter the bankruptcy discharge. The case is typically completed in about four to five months.
Chapter 13 plan – This is the payment plan that you will enter to pay your creditors. The bankruptcy court must approve it.
Petition date – This is the date that you file for bankruptcy. It divides your debt and payment obligations into “pre-petition” and “post-petition.” Your bankruptcy will include and discharge your pre-petition debt, while you may remain obligated to pay any post-petition debts.
Trustee – This person is appointed as an administrator of the bankruptcy case, and is usually a lawyer with expertise in bankruptcy law. In a Chapter 13 case, the trustee will review and administer the Chapter 13 plan and distribute payments to creditors. The trustee will also convene and preside over the meeting of creditors.
Meeting of creditors – A meeting where you and your attorney will meet with the trustee and confirm under oath the information you have provided in your bankruptcy documents. The trustee may ask additional questions. Typically, no one else attends the meeting, but other creditors may attend, ask questions, and raise objections.
Co-debtor stay – This protects other co-owners on an account or other property, even if the co-owner did not file for bankruptcy.
Contact a St. Petersburg Bankruptcy Lawyer Today for a Free Consultation
If you are considering filing for bankruptcy, the attorneys at Berkowitz and Myer are here to help you with this decision. If you choose to proceed, our attorneys will make sure you understand every step of the process, and never leave you to decipher the legal jargon on your own. Call us at (727) 344-0123 or email us to schedule your free consultation.