If you are going through a bankruptcy in Florida, you may find that you are hearing terms for the first time and are unsure exactly what they mean. Below are some common terms used in consumer bankruptcy proceedings and their definitions.
— Automatic stay: This is an injunction thatstops all action in foreclosures, garnishments, collection activities and lawsuits against debtors who have filed a petition for bankruptcy.
— Bankruptcy estate: All of the equitable or legal interests that the debtor has in property when the bankruptcy is filed. This includes any and all property wherein the debtor hasa percentage or interest.
— Consumer debts: Debts that were incurred for personal reasons rather than business needs.
— Current monthly income: This is computed by taking the average monthly income of the debtor for the past six months before the bankruptcy was filed. It includes non-debtors’ contributions to the household’s expenses and spousal income in joint petitions. It excludes social security and some other payments.
— Discharge: This releases debtors from all personal liabilities for specific dischargeable debts established in the Bankruptcy Code. Creditors may no longer take collection action against debtors or contact them about their discharged debts.
— Exempt property: Specific property belonging to a debtor that he or she is permitted to keep after declaring bankruptcy. This may include, but is not limited to, some or all equity in the debtor’s home or his or her “tools of their trade” necessary for them to earn a living.
— 341 meeting: Also called a “creditors’ meeting,” this is a gathering of creditors that is required under the Bankruptcy Code’s section 341. During the meeting, the debtor must answer questions under oath from the trustee, examiner and creditors about their financial status.
If you are considering filing for consumer bankruptcy, you may wish to consult a Florida bankruptcy attorney for advice.
Source: United States Courts, “Bankruptcy Basics” Nov. 13, 2014