Credit Counseling - prior to filing for bankruptcy, debtors are required to take a credit counseling from an approved provider of credit counseling. To obtain approval, organizations offering a credit counseling course must file an application with the United States Department of Justice - United States Trustee Program.
Creditor - A person or organization to whom a debtor owes a debt.
Debtor - A petitioner who has filed a bankruptcy petition pursuant to Title 11 of the United States Code.
Disbursements - Payments made to creditors by the Chapter 13 Trustee pursuant to the debtor’s approved Chapter 13 plan.
- The complete satisfaction and elimination of debt by the debtor upon successful completion of the Chapter 13 plan.
Also see "Dismissal vs. Discharge
Employer Deductions - An order that is filed with the United States Bankruptcy Court and submitted to the employer so that Chapter 13 payments are deducted automatically from the debtor’s paycheck.
Feasibility - A term used in bankruptcy to say that a plan can complete as proposed as long as the debtor’s payments into the plan are timely made. In a Chapter 13 plan, to be feasible, the plan must complete within a 3-5 year time frame.
Final Report - A final report is a final accounting filed by the Trustee with the United States Bankruptcy Court which details all of the funds received by the debtor in Chapter 13 payments and all the funds paid by the Chapter 13 Trustee pursuant to the debtor’s Chapter 13 plan.
Final Review - This is when the file is reviewed making sure that all claims that have been filed with the United States Bankruptcy Court have been paid by the Trustee’s office.
Financial Management Instructional Course - to earn a bankruptcy discharge, debtors are required to take a two hour course in financial management from an approved provider.
To obtain approval, organizations offering a financial management instructional course must file an application with the United States Department of Justice - United States Trustee Program.
Ledger Statement - A report that shows the status of a Chapter 13 plan:
• Creditors that have filed a proof of claim
• Receipts from debtor
• Amount that has been paid to each creditor
This statement is an overview of your complete case and it is mailed one time a year to the debtor.
Means Test - also known as "The Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income". A statistical calculation which determines a debtor's applicable commitment period for the Chapter 13 plan and the starting point in determining the amount of funds to be paid unsecured creditors.
Motions - A legal document made before the court requesting that the court grant the moving party a right to take some action. For example, if the debtor does not make payments into the Chapter 13 plan, the Trustee will motion the court to dismiss the case.
Motion to Value - This motion is filed by the debtor’s attorney stating that a certain secured property has a lesser value than what is owed on that piece of property.
Objection - A legal document filed with the United States Bankruptcy Court when a party is not in agreement with statements made by another party. For example, a creditor may object to the court approving a debtor’s Chapter 13 plan, if a creditor believes that the creditor is not receiving appropriate compensation for the creditor’s claim.
Order Confirming Plan (OCP)
- An order confirming plan
is filed with the United States Bankruptcy Court by the Chapter 13 Trustee. This order is filed if the Trustee recommends confirmation (approval) of the Chapter 13 plan as filed and the court has accepted the Trustee’s recommendation.
Orders - An order is a directive by the court for the parties to abide by certain terms and conditions either agreed to amongst the parties (agreed entry) or a directive made directly from the court.
Petition - The document that begins the bankruptcy proceeding.
Plan - A summary of the debtor's financial reorganization which states how creditors are to be paid.
Priority - An unsecured debt which must be paid 100% pursuant to 11 USC Section 507 (Ex. alimony, child support, certain taxes).
Projected Disposable Income - a debtor's gross income minus reasonably necessary living expenses (not necessary a debtor's living expenses at the time the bankruptcy case is filed). These funds must be paid into the Chapter 13 plan for the benefit of creditors for the applicable commitment period.
Proof of Claim (POC)
- A document filed by the creditor stating the amount that is owed to the creditor by the debtor. A POC must be filed by the creditor in order to be paid by the Chapter 13 Trustee.
For a sample of a proof of claim
Provisional - Provisional refers to a set time period in which parties in a bankruptcy must take some action. For example, the Trustee often files provisional motions to dismiss giving the debtor 30 days to bring their plan into compliance with Title 11 or to bring their payments current to the Trustee.
Relief from stay - A motion brought by a mortgage holder, car lender, or other creditor holding a secured claim on the debtor’s assets. The motion is a statement made before the United States Bankruptcy Court in which the creditor asserts that the debtor has not made regular payments and that the creditor is asking permission to recover said assets either under applicable federal or state law.
Secured - A claim secured by a lien on the debtor’s property, a security agreement or an involuntary lien such as a judgment.
Semi-Monthly Payment - To make your Chapter 13 payment twice a month.
Trustee Recommendation - A pleading filed by the Trustee to resolve issues regarding the type of claim and amount listed in the debtor’s plan and the actual claim filed by the creditor.
United States Trustee Program - The United States Trustee Program is a division of the United States Department of Justice. The United States Trustee has jurisdiction over bankruptcy cases filed in the United States and has the authority to bring civil or criminal litigation against petitioners, creditors, and other parties who are attempting to abuse the bankruptcy system.
Unsecured - A claim is unsecured if there is no collateral that is security for the debt. Most consumer debts are unsecured.