Bankruptcy Terminology A to Z

A formal civil lawsuit arising within a bankruptcy case commenced by filing a complaint with the court. Common adversary proceedings include actions to determine the dischargeability of a debt (§ 523), revoke a discharge, or challenge fraudulent transfers.

An agreement where the debtor or trustee elects to continue performing obligations under an existing executory contract or unexpired lease (such as an auto lease or apartment rental), curing any outstanding defaults.

A powerful statutory injunction that takes effect the millisecond a bankruptcy petition is filed. It immediately prohibits creditors from initiating or continuing lawsuits, foreclosures, wage garnishments, repossessions, and collection phone calls.

The uniform federal statutory framework governing all bankruptcy proceedings across the United States, structured into chapters including Chapter 7, 11, 12, and 13.

All legal, equitable, and contractual interests of the debtor in property at the exact time the bankruptcy petition is filed, which is then shielded by state or federal exemptions.

A private fiduciary appointed by the Department of Justice U.S. Trustee Program to administer the debtor's estate, conduct the 341 meeting, collect non-exempt assets in Chapter 7, or disburse monthly plan payments in Chapter 13.

The liquidation chapter of the Bankruptcy Code that wipes out qualifying unsecured debts (credit cards, medical bills, personal loans) in 90 to 120 days without requiring a repayment plan.

The wage earner reorganization chapter allowing individuals with regular income to propose a court-supervised 3-to-5 year repayment plan to cure delinquent mortgage arrears, stop foreclosure, and protect non-exempt property.

An exclusive Chapter 13 protection that automatically shields individuals who co-signed consumer debts with the debtor from creditor lawsuits, collection calls, and enforcement actions.

The formal federal court hearing where the bankruptcy judge determines whether the debtor's proposed Chapter 13 repayment plan satisfies statutory standards and becomes legally binding on all creditors.

The debtor's average gross monthly household income received from all sources over the six full calendar months prior to filing, used to calculate Texas Means Test qualification.

The final federal court decree legally releasing the debtor from personal liability for specified dischargeable debts, permanently enjoining creditors from ever attempting to collect the released balances.

The remaining monthly income available after deducting allowable standard IRS living expenses and secured mortgage/vehicle debt payments, dedicated toward paying unsecured creditors in Chapter 13.

The net market value of an asset exceeding the total balance of all secured consensual liens, mortgages, and tax encumbrances against it.

Statutory categories of property that individual debtors are permitted by law to retain completely free from bankruptcy trustees and judgment creditors.

The statutory formula determining whether an individual filer qualifies for Chapter 7 liquidation by comparing six-month gross household earnings against the state median income.

A mandatory brief conference held approximately 30 to 45 days post-filing where the bankruptcy trustee reviews the debtor's filed schedules under oath to verify asset disclosures and identification.

A formal court application submitted by a secured lender (such as a mortgage holder or auto lender) requesting permission from the bankruptcy judge to resume foreclosure or repossession due to post-petition payment defaults.

A Chapter 7 filing in which all of the debtor's real and personal assets are completely covered by Texas or federal exemptions, leaving zero non-exempt property for the trustee to liquidate for unsecured creditors.

Specific categories of liabilities (such as child support, spousal maintenance, recent income taxes, and criminal restitution) that cannot be eliminated through a bankruptcy discharge.

Unsecured claims that federal statute mandates must be paid ahead of general unsecured debts, including domestic child support, recent taxes, and court administrative fees.

A formal sworn written statement and supporting accounting documentation filed by a creditor detailing the exact amount and legal basis for money owed by the debtor.

A voluntary legal agreement executed by a Chapter 7 debtor promising to remain personally liable on a secured debt (such as a vehicle loan or home mortgage) in order to keep the collateral.

The detailed legal inventories filed with the bankruptcy court detailing real property (Schedule A/B), exemptions (Schedule C), secured/unsecured creditors (Schedules D/E/F), income (Schedule I), and expenses (Schedule J).