If you are like most individuals filing bankruptcy for the first, or even second time, there will be a lot of unfamiliar terms and expressions you hear from your attorney and the Trustee. Hopefully, the following list will give you enough information that you can be a little more confident in your attorney’s office and in the courtroom:

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The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA):This was the most significant amendment to the laws that govern bankruptcy since 1978. BAPCPA was lobbied for and supported by the credit industry, so it is riddled with traps and tests for debtors trying to discharge their debts (this is the law that created the Means Test). Because of its large size and complexity, there are still a lot of aspects about BAPCPA that are unchartered waters. As times goes on, new case opinions are issued by the courts that help clarify and direct how certain portions of BAPCPA should be interpreted.



Collateral: An asset that secures a particular debt, such as when a house secures a mortgage.

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Discharge: An order from the court, clearing you from all responsibility for all debts that are able to be discharged. Some debts are not eligible to be discharged, such as student loans.

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Exempt Property: Exempt property refers to the assets that you can keep in a bankruptcy, no matter what. These assets are completely off-limits to creditors.

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Joint Bankruptcy: You can file bankruptcy by yourself, or you can file bankruptcy together with your spouse. In the latter case, it is referred to as a joint bankruptcy.

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Lien: When a debt is secured by a certain asset, the creditor may take, or seize, that property when you do not pay. This power of seizure that the creditor has is called a lien. For example, if you have a mortgage owing on a home, the bank may seize your home through a foreclosure suit if you fail to pay your house payment.

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341 Meeting: About a month after you file for bankruptcy, a meeting is held, at the Law and Justice Center in Bloomington, where the Trustee and your creditors can interrogate you about your assets, income, and debts. It is extremely important to be prepared for this meeting, including the exact preparation of all supporting documentation. This meeting is where most fraud and illegal activity is discovered about debtors, and it is the job of the Trustee to discover any such behavior or actions.



Redemption: If you own property that is above and beyond what you are allowed through the exemptions, you may redeem this property from the Trustee by paying him the current value of said property.

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Reaffirmation: There are certain debts that you may want to remain liable for, even though they would be discharged in your bankruptcy. A debt that is reaffirmed is not discharged at the end of your case.

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Bankruptcy Estate: The estate is made up of all of your property, and everything you own on the date that you file your petition.