Wojtan, Vallone & Melin Attorneys at Law
Serving clients in Buffalo, Cheektowaga and throughout Western New York
Most debtors who file a bankruptcy petition, and many of their creditors, know very little about the bankruptcy process. This glossary on bankruptcy terminology explains, in layman’s terms, many of the legal terms that are used in cases filed under the Bankruptcy Code.
The Servicemembers’ Civil Relief Act applies in bankruptcy cases. It provides protection to members of the military against the entry of default judgments and gives the court the ability to stay proceedings against military debtors.
Chapter 12 is designed for “family farmers” or “family fishermen” with “regular annual income.” It enables financially distressed family farmers and fishermen to propose and carry out a plan to repay all or part of their debts.
The chapter of the Bankruptcy Code providing for adjustment of debts of an individual with regular income. (Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.)
A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code.
The bankruptcy discharge varies depending on the type of case a debtor files: chapter 7, 11, 12, or 13. Here, we’ll attempt to answer some basic questions about the discharge available to individual debtors under all four chapters.
Debtors should be aware that there are several alternatives to chapter 7 relief. For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation.
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