Bankruptcy Terms You Should Know
Sometimes an educated consumer can get confused with many of the terms associated with filing bankruptcy. Even more confusing to most people is the process of eliminating debt through bankruptcy. While bankruptcy aims to relieve individuals and business from debt stress, the rules can intimidate and discourage anyone at first glance. If you finances are in dire straits, bankruptcy may be what you need to pull you through tough times. To help ease your worries, a Los Angeles bankruptcy attorney who knows the law and the bankruptcy system offers the following definitions of legal terminology:
You initiate a bankruptcy case by filing a petition and several other documents containing a complete picture of your financial situation. The bankruptcy rules require you to list all of your debt obligations, property that you own, income that you earned over the past six months and other relevant financial information. The estate is the compilation of various property or assets that you own, including community property.
A discharge is a court order that releases a debtor from their personal liability for certain qualified debts itemized on the bankruptcy petition. The order permanently prevents creditors from using any form of collection action against the debtor, including filing law suits or making telephone calls. The main goal of a Chapter 7 bankruptcy is to obtain a discharge of most debts. A bankruptcy discharge should not be confused with dismissal – which is a court order stopping the bankruptcy proceedings without issuing a discharge order.
Debts that are eligible for discharge (elimination) at end of your bankruptcy case can include medical bills, credit card debt and other unsecured debt. You remain liable to pay other non-dischargeable debts such as alimony, child support and most taxes.
The automatic stay is an injunction that, from the instant you file a bankruptcy petition, automatically prevents your creditors from taking collection actions against you for a debt you owe. Collection activities, including wage garnishment, lawsuits, foreclosure and communications with you demanding payment for a debt must stop unless a judge rules otherwise. The automatic stay cannot stop a criminal proceeding or child support collections.
The bankruptcy process and its specialized terminology can be simplified with the help of a Los Angeles bankruptcy attorney with over 30 years of experience. The attorneys at the Law Offices of Michael Jay Berger have the knowledge and experience to answer all of your questions.