If you are considering bankruptcy and are looking into the process, chances are there are a number of terms that you don’t know. Below we will explain some of the more common terms that you will come across. As always, if you are considering filing for bankruptcy, you’ll want to work with a bankruptcy lawyer that can help you understand and walk you through how to file.
Automatic Stay – this action suspends all actions being taken against the debtor, including debt collection by creditors or foreclosure. This occurs automatically once a bankruptcy petition is filed.
Bankruptcy Estate – any of the debtor’s legal or equitable interests in property at the time the bankruptcy is filed. The estate includes all property in which the debtor has an interest, even if it is currently owned or held by another person.
Bankruptcy Petition – the document that must be filed with a bankruptcy court to initiate a bankruptcy proceeding.
Creditor – a person or lender or business to which a debtor owes money.
Discharge – the satisfaction or elimination of debts owed by the debtor by the bankruptcy court. The goal of entering bankruptcy is to “discharge” all debt.
Exemptions – Assets or properties owned by a debtor that are protected and cannot be recovered by creditors.
Liquidation – the dissolution of a company, or individual. This usually refers to the liquidation of assets, which means assets are sold off in auction to pay back debt owed to creditors.
Trustee – an agent of the bankruptcy court who manages the property and assets of a debtor. This is done for the benefit of the creditors. A trustee will manage the bankruptcy estate as well as any sale of assets.
Working with a Bankruptcy Attorney
Bankruptcy can be an overwhelming process. That’s why we advise that you work with a phoenix business bankruptcy lawyer that is familiar with various debt repayment options. We are committed to helping our clients understand their rights and options under the bankruptcy law and developing the debt relief solution that makes the most sense for each individual. We invite you to call (602) 648-3274 or contact our Arizona office to schedule a free initial consultation.
668 N. 44th St., Ste 320, Phoenix, AZ 85008