Glossary of Common Bankruptcy Terminology

Whether you are a debtor or a creditor, the terminology used in bankruptcy can be confusing. Here is a glossary of frequently used terms:

adversary proceeding: A lawsuit

asset: Anything you own outright that can be sold for cash. It can be something large, such as a house or car, or something small that might be overlooked, like artwork or jewelry, regardless of its value.

automatic stay: When a bankruptcy petition is filed with the court, the debtor is awarded an automatic stay. This means that creditors have to stop attempting to collect debts and may not obtain judgments against or take property from the debtor.

bankruptcy: A legal process by which an individual or a business entity unable to pay debt can seek court assistance to get a fresh start. Under the protection of the bankruptcy court, debts may be discharged, usually by paying a portion of the amount owed to each creditor.