Most legal proceedings are filled with technical jargon and legal definitions that are unknown to people without a law degree or people without a background in the law. If you don’t know what the terms being used mean, it can be hard to get a firm handle on what certain things mean in your case. With bankruptcy, the problem can be escalated because emotions are running high given the main issue is your money, and your money problems. It can help to have a basic understanding of some of the terms that you will hear frequently throughout your case, so you feel comfortable with what is happening.
One phrase you might hear a lot when filing bankruptcy is “proof of claim”. A proof of claim is a document filed by a creditor, setting forth the amount of the debt you owe that particular lender. Creditors file proofs of claim so the Court and Trustee assigned to your case are aware of how much you owe. Proofs of claim are most often filed in Chapter 13 cases, so the debt can be repaid but can also be filed in a Chapter 7 if the Trustee files a notice directing creditors to file a claim. Other terms of art you will hear a lot when you file bankruptcy include:
- Discharge: this is the entry in your case that officially declares your debts no longer due. Obtaining a discharge is the goal of all bankruptcy cases, and debts that have been discharged are not collectible.
- Automatic Stay: this is the provision of the Bankruptcy Code that prohibits lenders from contacting you once a case has been filed and also prohibits lenders from maintain a collection lawsuit or garnishment against you. The purpose of the automatic stay is to give a distressed consumer a break from collection efforts so they can focus on their bankruptcy case and getting their finances back in order.
- Means Test: the means test is a mathematical computation that, once performed, will dictate which chapter of bankruptcy you must file. The implementation of this test was one of the major changes to the Bankruptcy Code in 2005 and was put in place to help ensure those that are able to pay back at least a portion of their unsecured debt do so.
We understand that not everyone has a familiarity with bankruptcy terminology, and are here to help explain things to you. Call us today to learn what you can do about your debt, and what it takes to get a fresh financial start.
For more information about bankruptcy, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.