Bankruptcy Terms

Terms used in Chapter 7 and Chapter 13 consumer bankruptcy.

• Chapter 7 Bankruptcy

  A bankruptcy process that liquidates non-exempt assets to discharge most unsecured debt, typically completed in a few months.

• Chapter 13 Bankruptcy

  A bankruptcy process that reorganizes debt into a 3-5 year repayment plan, often used to keep assets a Chapter 7 filing would liquidate.

• Means Test

  The income-based calculation that determines whether a filer qualifies for Chapter 7 or must file Chapter 13 instead.

• Automatic Stay

  The bankruptcy-filing protection that immediately halts most creditor collection actions, including lawsuits and garnishments.

• 341 Meeting (Meeting of Creditors)

  A required short hearing early in a bankruptcy case where a trustee and any creditors can ask the filer questions under oath.

• Dischargeable Debt

  Debt that bankruptcy can legally eliminate, as opposed to non-dischargeable debt like most student loans, recent taxes, and child support.