COMMON BANKRUPTCY TERMS

DEBTOR

Also called filer or petitioner. Person who files a bankruptcy petition. Can be a business or a married couple (called a joint filing).   

CREDITOR

Person or business to whom a debtor owes money. The holder of a claim.  

CLAIM

The right to payment from the debtor. 

PRIORITY CLAIM

A claim which by law must be paid by the bankruptcy trustee ahead of other claims. For example, a claim for unpaid domestic support or taxes.   

SECURED CREDITOR

A creditor that holds a charge or lien against a debtor’s property. Usually a mortgage on a house or a lien on a car. Typically, debtor is making payments to a secured creditor to repay money borrowed to purchase the property.   

UNSECURED CREDITOR

A creditor that has a claim against a debtor that is not secured by the debtor’s property. An example would be most credit card debt, medical bills or deficiency claims.   

LIEN

A charge or claim against debtor’s property. Usually held by a secured creditor to insure re-payment of a loan.  

CREDITORS' MEETING

Also called Section 341 meeting. A meeting between the debtor and the trustee where the debtor is examined under oath by the trustee, and any creditors who attend, regarding matters relating to the bankruptcy filing. In Fort Myers, these meetings occur at the Federal Courthouse in downtown Fort Myers.  

TRUSTEE

Individual appointed to inquire into the debtor’s filing and to administer the bankruptcy estate. 

DISCHARGE

Bankruptcy Court’s order to creditors prohibiting them from attempting to enforce claims for money against the debtor. Has the practical effect of forgiving or canceling debts.   

EXEMPT PROPERTY

Property which cannot be sold to pay claims of unsecured creditors. In Florida, exempt property includes one home, $1,000.00 of personal property, $1,000.00 value in a car and any IRA or other retirement plan the debtor may own. If debtor does not own a house he or she may claim an additional $4,000.00 personal property exemption. Joint filers may each claim these exemptions. The debtor gets to keep his or her exempt property regardless of the type of bankruptcy filed. 

NEED MORE?

For more information from a Bankruptcy Attorney Explaining Bankruptcy Terms In Cape Coral, Fort  Myers, or Lehigh Acres call (239) 334-7107.

or 

for more information about Bankruptcy Terms Debtor Creditor Claim Lien Meeting Trustee Discharge Exempt call (239) 334-7107