Bankruptcy law has its own set of terms and concepts listed below in alphabetical order.
Adversary Proceeding
Assume
Bankruptcy
Bankruptcy Estate
Bankruptcy Judge
Bankruptcy Petition
Claim and Proof of Claim
Adversary Proceeding:
An adversary proceeding is a lawsuit which arises within or is related to an existing bankruptcy case, common complaints are for violations of the automatic stay; proceedings to determine the extent and validity of a lien; a lawsuit to set aside a preference or fraudulent conveyance; etc. Refer to Federal Rules of Bankruptcy Procedure 7001 for a list of types of actions which must be brought by adversary proceeding.
Assume:
Example: “To assume a lease”
To “assume” an agreement (like a lease) is when the debtor agrees to continue to perform his duties under the contract. If you assume the lease where you live, you will continue to pay the lease and live there. This situation is most often found in Chapter 13 cases.
See also Executory Contract
Bankruptcy:
Bankruptcy is a legal process under federal law for individuals and businesses to deal with debt relief. Most of the statutes governing bankruptcy are found in Title 11 of the United States Code. Common Chapters under Title 11 are Chapter 7, Chapter 11, and Chapter 13. Title 11 is also referred to as the “Bankruptcy Code.”
Bankruptcy Estate:
The Bankruptcy Estate is a legal entity which is created when a debtor files a bankruptcy proceeding. The estate consists of all legal and equitable interests of the debtor in property at the time of the bankruptcy filing. The Bankruptcy Estate also includes all property which the debtor acquires through a marital dissolution agreement (divorce) within 180 days after the petition is filed. Additionally, the estate includes any property the debtor inherits within 180 days after the bankruptcy petition is filed.
Bankruptcy Judge:
The bankruptcy judge is a judicial officer of the United States District Court. He or she is the court official with the authority and power to make decisions in federal bankruptcy cases. The bankruptcy judge presides over bankruptcy court, a unit of the federal district court.
Tennessee has three federal districts, the eastern, middle, and western districts of Tennessee. There are bankruptcy courts in each of the three districts.
Bankruptcy Petition:
The bankruptcy petition or “the petition” is the document filed by the debtor to open or commence (start) the bankruptcy case. Almost all bankruptcy petitions are “voluntary” petitions filed by the debtor. However, a bankruptcy can be filed against a debtor by its creditors in an “involuntary” case. The bankruptcy petition usually consists of the statements and schedules of the debtor, listing all assets and liabilities of the debtor. All property and interests in property of the debtor must be listed as well as all debts. In addition, the official forms require a current monthly family budget of all sources of income and all reasonably necessary expenses of the debtor(s). Finally, a list of questions regarding property transfers, business interests, gross income for the prior years, safe deposit boxes, etc is required to be answered. These questions are called the “statement of financial affairs.”
A claim is a belief by the creditor that he has a right to payment from the debtor’s bankruptcy estate. The process by which a creditor asserts their claim is by the filing of a “proof of claim” with the United States Bankruptcy Court Clerk.
A “proof of claim” is a written statement and verifying documentation filed by a creditor that describes the reason the debtor owes the creditor money. The bankruptcy court clerk has an official form for a proof of claim.
