Bankruptcy Terminology M-Z

Introduction

Bankruptcy is fast becoming an everyday topic of conversation. Its impact on the lives of individuals and corporations can affect them in numerous ways. Like most specialties, bankruptcy law has a language of its own. Its unfamiliar words and phrases make it difficult to comprehend. This web page on bankruptcy law terminology explains, in plain English, many of the legal terms that are used in cases filed under the Bankruptcy Code. Also included are a few selected terms and acronyms that may be used in bankruptcy courts and by legal professionals. These terms are also provided to give you a basic idea of the terms that are referred to and may be used in discussions at our Bankruptcy Forum.

While defining some terms, we felt an example might further explain the definition. Examples are in italics.

Our dictionary is set up in alphabetical order where appropriate.

Disclaimer

Please click on the beginning letter of the alphabet for the term you are looking up to jump to the definition below, or browse.

Market Value
Where the collateral is retained by the debtor, the proper value is the replacement or fair market value of the of the collateral, not its liquidation or foreclosure value [Associates Commercial Corp. v. Rash, 520 US 923, 117 SCt 1879, 138 LEd2d 148 (1997)].

Replacement value is not what it would cost the debtor to purchase the collateral new, but is the "price a willing buyer in the debtor's trade, business, or situation would pay a willing seller to obtain property of like age or circumstance. Whether replacement value is the equivalent of retail value, wholesale value, or some other value will depend upon the type of debtor and the nature of the property.

Meeting of Creditors
The debtor must appear at a meeting before the trustee to be examined under oath about assets and liabilities which is usually held approximately 30 days after filing the petition. Creditors are invited but seldom attend. The meeting is sometimes called the 341 meeting, after the section of the Bankruptcy Code that requires it.

Modification
Refers to a change in the terms of a filed plan. A plan may be changed by the proponent of the plan or the reorganized debtor before or after confirmation. If the modification is sought after a plan has been confirmed, the plan, as modified, must still meet the same confirmation tests as the original plan.

Motion To Lift The Automatic Stay
A request by a creditor to allow the creditor to take an action against a debtor or the debtor's property that would otherwise be prohibited by the automatic stay.

Municipality
Under 11 U.S.C. Section 101, the term:
(40) ''municipality'' means political subdivision or public agency or instrumentality of a State;

| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |

No Asset Case
A bankruptcy case may have no assets that may be liquidated and the proceeds distributed to the creditors. A case is a "no-asset" case when, after satisfaction of secured claims and payment of anticipated administrative expenses, there will be no proceeds from the liquidation of nonexempt property available for distribution to the unsecured creditors. In these cases, which constitute by far the majority of chapter 7 cases, there is nothing for the trustee to administer and no dividend distribution will be made to the unsecured creditors.

Even though a debtor may have assets (real estate, automobiles, accounts receivable), if those are fully exempt or fully encumbered, the case may be a “no asset” case.

Non Dischargeable Debt
A debt that cannot be eliminated in bankruptcy. Non dischargeable debts remain legally enforceable despite the bankruptcy discharge. (11 U.S.C. 523)

Obtaining credit by fraud or a debt for alimony, maintenance or child support are types of debts that may be non-dischargeable.

Non-Possessory Nonpurchase Money Lien
If the debt was incurred for a purpose other than buying the collateral, as with refinanced home loans, home equity loans or loans from finance companies. (See Possessory Non-Purchase Money Lien and Purchase­Money Security Lien).

| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |

Objection to Claim
The filing of an objection to a claim initiates a process that ultimately will result in the allowance or disallowance of that claim by the Bankruptcy Court.

Objection To Discharge
A trustee's or creditor's objection to the debtor's being released from personal liability for certain dischargeable debts.

Objection To Exemptions
A trustee's or creditor's objection to a debtor's attempt to claim certain property as exempt, i.e., not liable for any prepetition debt of the debtor.

Order For Relief
The actual court order determining that a debtor is subject to the control of the bankruptcy court.

In a voluntary case, the order for relief is automatic upon the filing of the petition. In a contested involuntary case, the order for relief is entered only after the court is satisfied that the debtor should be in a bankruptcy proceeding.

| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |

Pacer (see also CM/ECF)
Public Access to Court Electronic Records. These electronic records include general case information, the docket and claims register. These electronic records allow access to the records via the Internet. Some PACER systems allow access to electronic images of court documents.

Party(Ies) In Interest
Entities and individuals affected by a bankruptcy case, including the debtor, any appointed trustee, any appointed committees, any creditors or stockholders, and the United States Trustee.

Payments
Distributions made to the creditors in accordance with the plan.

Perfection
When a secured creditor has taken the required steps to perfect his lien, the lien is senior to any liens that arise after perfection. A mortgage is perfected by recording it with the county recorder; a lien in personal property is perfected by filing a financing statement with the secretary of state. An unperfected lien can be avoided by the trustee.

Person
Under 11 U.S.C. Section 101, the term:
(41) ''person'' includes individual, partnership, and corporation, but does not include governmental unit, except that a governmental unit that -
(A) acquires an asset from a person -
(i) as a result of the operation of a loan guarantee agreement; or
(ii) as receiver or liquidating agent of a person;
(B) is a guarantor of a pension benefit payable by or on behalf of the debtor or an affiliate of the debtor; or
(C) is the legal or beneficial owner of an asset of -
(i) an employee pension benefit plan that is a governmental plan, as defined in section 414(d) of the Internal Revenue Code of 1986; or
(ii) an eligible deferred compensation plan, as defined in section 457(b) of the Internal Revenue Code of 1986; shall be considered, for purposes of section 1102 of this title, to be a person with respect to such asset or such benefit;

Personal property
Property that is not real property or affixed to real property, such as cars, clothing, furniture, jewelry, appliances, etc.

Petition
Under 11 U.S.C. Section 101, the term:
(42) ''petition'' means petition filed under section 301, 302,303, or 304 of this title, as the case may be, commencing a case under this title;

The document that initiates a bankruptcy case. The filing of the petition constitutes an order for relief and institutes the automatic stay. Events are frequently described as "prepetition", happening before the bankruptcy petition was filed, and "post petition", after the bankruptcy is closed.

Plaintiff
A person or business that files a formal complaint with the court.

Plan of Reorganization
Chapter 11

The Chapter 11 plan must contain, among other things, a division of the claims into various classes, a description of the treatment of each claim, a comparison of the treatment under the Chapter 11 plan to projected treatment under Chapter 7 (liquidation) and the means for carrying out the plan. Once a plan is proposed and a disclosure statement approved, the plan will be distributed to creditors for voting. The court, in each case, will set rules for the balloting process.

Chapters 12/13

The plan must provide for a distribution to the debtor's creditors of all the debtor's projected disposable income over the term of the plan. The plan's term is a minimum of three years, but no longer than five years. The plan must describe the treatment of all classes of creditors, the amount of the payments to be made by the trustee, and the length of time that the plan will be in effect. In return, the debtor pays into the plan the projected disposable income.

Postpetition Transfer

A transfer of a debtor's property made after the commencement of the case

Possessory Nonpurchase-Money Lien
If you own property that has been pledged to a pawnshop.

Pre-bankruptcy Planning
The arrangement (or rearrangement) of a debtor's property to allow the debtor to take maximum advantage of exemptions. (Prebankruptcy planning typically includes converting nonexempt assets into exempt assets.)

Preferential Debt Payment
A transfer to a creditor in payment of an existing debt made within certain time periods before the commencement of the case. Preferences may be recovered by the trustee for the benefit of all creditors of the estate.

Preferential Lien

A lien obtained under circumstances which makes it a preferential transfer and subject to being avoided.

Preferential Transfer
Certain transfers or payments made to creditors within 90 days before the bankruptcy is filed may be reversed and recovered by the bankruptcy court. Where the creditor is an insider (relative, shareholder, etc.) the 90 days is extended to one year. The recovery of these preferential payments is a method to provide an equal distribution among creditors of the same class.

A debtor owes many creditors but pays one "friendly creditor" in full just before filing the bankruptcy petition. This payment could most likely be recovered by the trustee to be spread among all creditors.

Prepackaged Bankruptcy (Pre-Pack)
Before filing a bankruptcy case (usually a Chapter 11) debtor and creditors negotiate an agreed upon plan. The bankruptcy petition can then be filed and the plan proposed and confirmed with much less time and expense.

Pre-Petition
Claims or events arising before the commencement of the bankruptcy case, that is, before the filing of the bankruptcy petition. Generally only pre-petition debts may be discharged in a bankruptcy proceeding.

Priority
The Bankruptcy Code establishes the order in which claims are paid from the bankruptcy estate. All claims in a higher priority must be paid in full before claims with a lower priority receive anything. All claims with the same priority share pro rata. Claims are paid in this order: 1) costs of administration 2) priority claims and 3) general unsecured claims. Secured claims are paid from the proceeds of liquidating the collateral which secured the claim.

Priority Claims
Certain debts, such as unpaid wages, spousal or child support, and taxes are elevated in the payment hierarchy under the Code. Priority claims must be paid in full before general unsecured claims are paid.

Wages owed to employees for the last pay period prior to filing the bankruptcy petition will probably be priority claims.

Professional Persons, Employment
All attorneys, accountants, appraisers, and other professional persons employed by a trustee or debtor in possession are required to be approved by an order of court to ensure that they are qualified and appropriate. In most situations, the professional is not entitled to payment without that payment being approved by an order of the court.

Proof of claim
The form filed with the court establishing the creditor's claim against the debtor.

Property of the Estate
The property that is not exempt and belongs to the bankruptcy estate. Property of the estate is usually sold by the trustee and the claims of creditors paid from the proceeds.

Purchaser
Under 11 U.S.C. Section 101, the term:
(43) ''purchaser'' means transferee of a voluntary transfer, and includes immediate or mediate transferee of such a transferee;

Purchase-Money Lien
If a debt was incurred to purchase the property, as with a mortgage or car note the security interest must have been “perfected” (filed or recorded with a county recorder or Department of Motor Vehicles) within 20 days of being created to be valid. (Fidelity Fanancial Services, Inc. v. Fink, 118 S. Ct. 651 (1998))

| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |

Reaffirm
The debtor can choose to reaffirm debts that would otherwise be discharged by the bankruptcy. Generally, when a debt is reaffirmed, the parties to the reaffirmed debt have the same rights and liabilities that each had prior to the bankruptcy filing: the debtor is obligated to pay and the creditor can sue or repossess if the debtor doesn't pay.

Reaffirmation Agreement

A bankruptcy discharge eliminates the debtor's personal liability for dischargeable debts. There are times when an individual debtor may want to reaffirm the debt. This enables the debtor to keep property which may be subject to a lien and on which the payments may be delinquent. The creditor may agree to a delay or a modification of the payment schedule in exchange for the debtor's reaffirming the debt. Reaffirming the debt recreates the personal liability and eliminates that particular debt from the discharge

Recoupment
A reduction or rebate in proceeds claimed by a party arising from the same transaction with another party, as opposed to a "set off" which arises from a transaction that is collateral or somehow related to the same transaction.

Redemption
When an individual debtor reclaims property intended primarily for personal, family or household use, from a lien securing a dischargeable consumer debt, if the property is exempt, or has been abandoned, by paying the lienholder the amount of the allowed secured claim of the lienholder that is secured by such lien. Redemption must be a cash transaction, unless the creditor consents to a payout over time.

Redemption Of Collateral
A creditor may have a lien on personal property of a debtor where the value of the property is less than the amount due. In that event, the code allows a debtor to pay the creditor the value of the property, rather than the balance due and eliminates the lien from the property.

Relative
Under 11 U.S.C. Section 101, the term:
(45) ''relative'' means individual related by affinity or consanguinity within the third degree as determined by the common law, or individual in a step or adoptive relationship within such third degree;

Relief from Stay
A creditor can ask the judge to lift the automatic stay and permit some action against the debtor or the property of the estate. If the motion is granted, the moving party (but no one else) is free to take whatever action the court permits. Relief can be absolute, for example, permitting the creditor to foreclose on property, or limited, as for example, allowing the recordation of a notice of default.

A bank holding a delinquent mortgage can move for relief from stay to foreclose. By offering to stay current on its payments, the debtor may prevent a relief from stay.

Removal
Where a party is in bankruptcy, removal is the act of moving a piece of litigation from another court to the bankruptcy court or the U.S. District Court.

Reorganized Debtor
The entity resulting from the confirmation of a Chapter 11 plan.

Repo Participant
Under 11 U.S.C. Section 101, the term:
(46) ''repo participant'' means an entity that, on any day during the period beginning 90 days before the date of the filing of the petition, has an outstanding repurchase agreement with the debtor;

Repurchase Agreement
Under 11 U.S.C. Section 101, the term:
(47) ''repurchase agreement'' (which definition also applies to a reverse repurchase agreement) means an agreement, including related terms, which provides for the transfer of certificates of deposit, eligible bankers' acceptances, or securities that are direct obligations of, or that are fully guaranteed as to principal and interest by, the United States or any agency of the United States against the transfer of funds by the transferee of such certificates of deposit, eligible bankers' acceptances, or securities with a simultaneous agreement by such transferee to transfer to the transferor thereof certificates of deposit, eligible bankers' acceptances, or securities as described above, at a date certain not later than one year after such transfers or on demand, against the transfer of funds;

Revocations Of Confirmation
On motion of a party in interest, within 180 days of the order confirming a Chapter 11 plan, the court may revoke the confirmation if it finds it was obtained by fraud.

| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |

Schedules
The debtor must file the required lists of assets and liabilities to commence a bankruptcy case, collectively called the schedules. . (There are official forms a debtor must use.)

Schedules Of Assets And Liabilities
Every debtor is required to file lists of assets and liabilities. These lists are on prescribed forms and divide assets and liabilities into various categories.

Scope
Property of the estate includes every interest which the debtor holds at the time of the filing of the petition. This includes virtually every ownership interest, including a claim which the debtor may have against another person.

Secured Creditor
A creditor holding a lien (secured claim) on property.

Secured Debt
A claim secured by a lien in the debtor's property by reason of the debtor's agreement or an involuntary lien such as a judgment or tax lien. The creditor's claim may be divided into a secured claim, to the extent of the value of the collateral, and an unsecured claim equal to the remainder of the total debt. Generally a secured claim must be perfected under applicable state law to be treated as a secured claim in the bankruptcy.

A first mortgage where the property is worth more than the balance due on the mortgage is a fully secured claim.

Securities Clearing Agency
Under 11 U.S.C. Section 101, the term:
(48) ''securities clearing agency'' means person that isregistered as a clearing agency under section 17A of the Securities Exchange Act of 1934 or whose business is confined to the performance of functions of a clearing agency with respect to exempted securities, as defined in section 3(a)(12) of such Act for the purposes of such section 17A;

Security
Under 11 U.S.C. Section 101, the term:
(49) ''security'' -
(A) includes -
(i) note;
(ii) stock;
(iii) treasury stock;
(iv) bond;
(v) debenture;
(vi) collateral trust certificate;
(vii) pre-organization certificate or subscription;
(viii) transferable share;
(ix) voting-trust certificate;
(x) certificate of deposit;
(xi) certificate of deposit for security;
(xii) investment contract or certificate of interest or participation in a profit-sharing agreement or in an oil, gas, or mineral royalty or lease, if such contract or interest is required to be the subject of a registration statement filed with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, or is exempt under section 3(b) of such Act from the requirement to file such a statement;
(xiii) interest of a limited partner in a limited partnership;
(xiv) other claim or interest commonly known as ''security''; and
(xv) certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase or sell, a security; but
(B) does not include -
(i) currency, check, draft, bill of exchange, or bank letter of credit;
(ii) leverage transaction, as defined in section 761 of this title;
(iii) commodity futures contract or forward contract;
(iv) option, warrant, or right to subscribe to or purchase or sell a commodity futures contract;
(v) option to purchase or sell a commodity;
(vi) contract or certificate of a kind specified in subparagraph (A)(xii) of this paragraph that is not required to be the subject of a registration statement filed with the Securities and Exchange Commission and is not exempt under section 3(b) of the Securities Act of 1933 from the requirement to file such a statement; or
(vii) debt or evidence of indebtedness for goods sold and delivered or services rendered;

Security Agreement
Under 11 U.S.C. Section 101, the term:
(50) ''security agreement'' means agreement that creates or provides for a security interest;

Security Interest
Under 11 U.S.C. Section 101, the term:
(51) ''security interest'' means lien created by an agreement;

Setoff
Where a creditor also owes money to a debtor, a setoff may be appropriate.

If a debtor owes a supplier $10,000, but the supplier has purchased product from the debtor and owes the debtor $15,000, the creditor has a setoff which should allow it to pay the debtor only $5,000.

Settlement Payment
Under 11 U.S.C. Section 101, the term:
(51A) ''settlement payment'' means, for purposes of the forward contract provisions of this title, a preliminary settlement payment, a partial settlement payment, an interim settlement payment, a settlement payment on account, a final settlement payment, a net settlement payment, or any other similar payment commonly used in the forward contract trade;

Single Asset Real Estate
Under 11 U.S.C. Section 101, the term:
(51B) ''single asset real estate'' means real property constituting a single property or project, other than residential real property with fewer than 4 residential units, which generates substantially all of the gross income of a debtor and on which no substantial business is being conducted by a debtor other than the business of operating the real property and activities incidental thereto having aggregate noncontingent, liquidated secured debts in an amount no more than $4,000,000;

Small Business
Under 11 U.S.C. Section 101, the term:
(51C) ''small business'' means a person engaged in commercial or business activities (but does not include a person whose primary activity is the business of owning or operating real property and activities incidental thereto) whose aggregate noncontingent liquidated secured and unsecured debts as of the date of the petition do not exceed $2,000,000;

State
Under 11 U.S.C. Section 101, the term:
(52) ''State'' includes the District of Columbia and Puerto Rico, except for the purpose of defining who may be a debtor under chapter 9 of this title;

Statement of Affairs
Pleadings filed with the Bankruptcy Court Clerk containing information about the financial transactions and affairs of a debtor.

Statement Of Financial Affairs
A series of questions the debtor must answer in writing concerning sources of income, transfers of property, lawsuits by creditors, etc. (There is an official form a debtor must
use.)

Statement Of Intention
A declaration made by a chapter 7 debtor concerning plans for dealing with consumer debts that are secured by property of the estate.

Statute
A legislative enactment.

The bankruptcy code is a statute.

Statutory Lien
Under 11 U.S.C. Section 101, the term:
(53) ''statutory lien'' means lien arising solely by force of a statute on specified circumstances or conditions, or lien of distress for rent, whether or not statutory, but does not include security interest or judicial lien, whether or not such interest or lien is provided by or is dependent on a statute and whether or not such interest or lien is made fully effective by statute;

A real estate tax lien is an example of a statutory lien.

Strong-Arm Powers
The bankruptcy code gives a trustee rights to reverse (avoid) certain transactions or liens which occurred within various time periods before the petition was filed. The trustee obtains the power that a hypothetical creditor would have had, even if no such creditor actually existed.

Substantial Abuse
An area where a chapter 13 may not only be preferable but, in fact, the sole relief available, is where the use of chapter 7 would constitute a "substantial abuse". In that case, an attempt to use chapter 7 could result in a dismissal of the case by the court on either its own motion or the motion of the U.S. trustee.

An individual with $50,000 of disposable income will probably be prevented from discharging his debts.

Substantive Consolidation
Putting the assets and liabilities of two or more related debtors into a single pool to pay creditors. (Courts are reluctant to allow substantive consolidation since the action must not
only justify the benefit that one set of creditors receives, but also the harm that other creditors suffer as a result.)

Superpriority (also see Credit, Post-Petition)
The granting, to a post-petition claim, of a priority right to payment above all other pre- and post-petition claims.

| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |

341 Meeting
A meeting of creditors at which the debtor is questioned under oath by creditors, a trustee, examiner, or the United States trustee about his/her financial affairs.

Timeshare Plan
Under 11 U.S.C. Section 101, the term:
(53D) ''timeshare plan'' means and shall include that interest purchased in any arrangement, plan, scheme, or similar device, but not including exchange programs, whether by membership, agreement, tenancy in common, sale, lease, deed, rental agreement, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives a right to use accommodations, facilities, or recreational sites, whether improved or unimproved, for a specific period of time less than a full year duringany given year, but not necessarily for consecutive years, and which extends for a period of more than three years. A ''timeshare interest'' is that interest purchased in a timeshare plan which grants the purchaser the right to use and occupy accommodations, facilities, or recreational sites, whether improved or unimproved,

Tort
A wrong; a private or civil wrong or injury resulting from a breach of a legal duty that exists by virtue of society’s expectations regarding interpersonal conduct, rather than by contract or other private relationship.

Transfer
Under 11 U.S.C. Section 101, the term:
(54) ''transfer'' means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property, including retention of title as a security interest and foreclosure of the debtor's equity of redemption;

Trustee
Appointment In Chapter 11

The code presumes a debtor will remain in possession of its property and business in a Chapter 11 case. In cases of fraud, gross mismanagement or where the appointment is in the interest of creditors, the court may appoint a trustee to take over the business of the debtor. The appointment of a trustee terminates the debtor's exclusivity period.

Authority To Operate Business
In Chapter 7, a trustee has the obligation to close the estate as expeditiously as possible. The court may authorize the trustee to operate the business of a debtor for a limited period of time.

Compensation
The maximum compensation allowed a trustee is based on a fixed percentage of monies disbursed to parties in interest. The court may reduce that compensation where appropriate. Where the trustee is also employed as a professional attorney or accountant in the case, the court may compensate those services separately.

Duties In Chapter 7
The trustee's duties include collecting and liquidating the property of the estate, investigating the financial affairs of the debtor, furnishing such information as is requested by a party in interest and making a final account and report to the court and the United States Trustee.

Duties In Chapter 11
The Chapter 11 trustee's duties include those in Chapter 7 as well as operation of the business of the Chapter 11 debtor.

Duties In Chapter 12/13
The duties of the trustee in Chapters 12 and 13 include many of the duties of a Chapter 7 trustee, but also include hearings on the valuation of property, confirmation of the plan and modification of the plan after confirmation. The trustee also is to insure the debtor makes timely payments.

Interim TRUSTEE
In a Chapter 7 (liquidation) case, the Office of the United States Trustee immediately appoints an interim trustee to administer the case. At the meeting of creditors, the creditors may, in certain circumstances, elect a trustee to replace the interim trustee. If no election is held, the interim trustee becomes the permanent trustee.

Turnover
Where someone holds property of the estate that should be in the control of the trustee, the court has the power to compel that person to turn the property over to the trustee for disposition.

Where the debtor' safe deposit box holds non-exempt property of the estate, the trustee may commence an adversary proceeding to force the bank to turn over the property.

Typing Service
A business (i.e., www.bankruptcypreparers.com) not authorized to practice law that prepares bankruptcy petitions, but authorized by the U.S. Congress under 11 U.S.C. 110.

| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |

Unclaimed Funds
Proceeds to creditors that were issued checks but did not clear and are returned to trustee. Trustee stops payment on the check and writes a check to the clerk of the bankruptcy court, who retains proceeds for 5 years and then are escheated to the U.S. Treasury, if unclaimed.

Undersecured Claim
A debt secured by property that is worth less than the amount of the debt.

The amount due a supplier for goods or services on an open account is an unsecured claim (Visa, Mastercard, Amex, etc.).

Unsecured Creditor
A creditor without a lien. Unsecured claims may or may not have priority.

Certain claims and wages for employees are unsecured claims. Most trade creditors are unsecured non-priority.

United States
Under 11 U.S.C. Section 101, the term:
(55) ''United States'', when used in a geographical sense, includes all locations where the judicial jurisdiction of the United States extends, including territories and possessions of the United States;

United States Trustee
An officer of the Justice Department responsible for supervising the administration of bankruptcy cases, estates, and trustees, monitoring plans and disclosure statements, monitoring creditors' committees, monitoring fee applications, and performing other statutory duties. Specific responsibilities of the United States Trustees, and their specific duties in Chapter 7 and Chapter 13 consumer bankruptcy cases.

Unliquidated Claim
A claim for which a specific value has not been determined.

Unliquidated Debt
An unliquidated debt is one where the debtor has liability, but the exact dollar amount of that liability is unknown. Tort claims are usually unliquidated until a court trial fixes the amount of the liability of the debtor.

Unscheduled Debt
A debt that should have been listed by a debtor in the schedules filed with the court but was not. (Depending on the circumstances, an unscheduled debt may or may not be discharged.)

Unsecured Debt/Claim
Creditor's claim without a priority for payment for which the creditor holds no security (or collateral). If the available funds in the estate extend to payment of unsecured claims, the claims are paid in proportion to the size of the claim relative to the total of claims in the class of unsecured claims. Most consumer debts are unsecured.

Unlawful Detainer Action
A lawsuit brought by a landlord against a tenant to evict the tenant from rental property--usually for nonpayment of rent.

Use, Sale Or Lease
A debtor in possession or the trustee may use, sell or lease property of the estate in the ordinary course of business. What "ordinary course of business" means is different for each case and depends upon the business of the debtor. If the debtor in possession or trustee wants to deal with property other than in the ordinary course of business, it must be done with court approval, after notice to creditors and other parties in interest.

| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |

Voidable Preference
A transfer of property by a bankrupt person to a creditor within one year of filing a petition in bankruptcy. Since such transfers deprive the other creditors from sharing in the property, the transfer is set aside and the property is brought back into the bankrupt’s estate. (11 U.S.C. 547(b))

Voluntary Case (also see Involuntary Case)
A voluntary bankruptcy proceeding.

Voluntary Transfer
A transfer of a debtor's property with the debtor's consent.

| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |

Withdrawal Of Reference
Although U.S. district courts have original jurisdiction over bankruptcy matters, they typically refer those matters to bankruptcy courts. Under certain circumstances, the district court must withdraw the reference (must take the case back) and may take the case back under any circumstances it deems appropriate.

Further definitions are found in Section 101 of the Bankruptcy Code.

Previous

| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |

If you don't find the legal term you seek... this is THE source... Look It Up!