Common Bankruptcy Terms and Definitions:
- Bankruptcy Court: Bankruptcy courts are created under the U.S. constitution. They are federal courts created by federal law. For the Bankruptcy Court for the District of Oregon, there are two court locations: one in Portland and the second in Eugene. The court’s website can be found at this link: https://www.orb.uscourts.gov/
- Debtor: A debtor is a person or entity owing money or consideration to another party. The other party is called a “creditor”. The debtor can also be called the “borrower” when the debt is a loan.
- Creditor: A creditor is a person or entity that lends money or extends credit to the borrower, or the debtor. Sometimes, the creditor requires collateral for the loan or extension of credit. A creditor has a right to repayment of the debt; often charging interest until the original loan or extension of credit is paid in full.
- Debt: A debt can be owed when a creditor extends credit or a loan of money to the borrower/debtor. It is an obligation for the debtor to give back value to the creditor. Payment terms for repayment of the debt can be outlined in a contract between the debtor and creditor.
- Bankruptcy Trustee: A trustee is a person appointed to represent a debtor’s bankruptcy estate when the debtor files for bankruptcy. The trustee determines if there is money or assets that can be recovered to pay creditors some or all of the debt owed to them. In Chapter 13 cases, the trustee receives a debtor’s monthly plan payments and administers those funds to the creditors throughout the life of the payment plan.
- Meeting of the Creditors: A Meeting of the Creditors is also called the 341a hearing. This is where the trustee will review debtor’s paperwork and ask questions to determine whether there are income or assets that can be recovered to pay some or all of the debts back. Creditors are provided notice of this hearing and can appear and ask the debtor questions.
- Bankruptcy Discharge: A bankruptcy discharge will release a person (the debtor) from personal liability to pay certain debts. Not all debts are discharged in bankruptcy. Common debts eligible for a discharge are credit card, medical, auto loan deficiency, personal loans and other miscellaneous consumer debts. In some situations, tax debt can be eligible for discharge although that inquiry is more complicated. In most situations, student loan debt does not qualify for discharge.
If you are considering a bankruptcy filing as your debt relief option, then you should consult with a bankruptcy lawyer.
Jessica Nomie Law is an Oregon bankruptcy lawyer serving people throughout the state, primarily in Clackamas and Portland areas. Jessica specializes in Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Her firm offers virtual representation options and free initial consultations.