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The Law Offices of Roger J. Yehl


Assume – An agreement to continue performing duties under a contract or lease

Automatic Stay – An injunction that automatically stops lawsuits, foreclosures, garnishments and all collection activity against the debtor the moment a bankruptcy petition is filed.


Bankruptcy– A legal procedure for dealing with debt problems of individuals and businesses, specifically, a case filed under one of the chapters of title 11 of the US bankruptcy code.

Bankruptcy Administrator – An officer of the judiciary serving in the judicial districts of NJ or NY who, like the US Trustee, is responsible for supervising the administration of bankruptcy cases, estates, and trustees, monitoring plans and disclosure statements, monitoring creditors’ committees, monitoring fee application and performing other statutory duties.

Bankruptcy Code – The informal name for title 11 of the US Code, for federal bankruptcy law.

Bankruptcy Court – The bankruptcy judges in regular active service in each district, a unit of the district court.

Bankruptcy Estate – All legal or equitable interests of the debtor in property at the time of the bankruptcy filing. (The estate includes all property in which the debtor has an interest, even if it is owned or held by another person.)

Bankruptcy Judge – A judicial officer of the US district court who is the court official with the decision-making power over federal bankruptcy cases.

Bankruptcy Petition – The document filed by the debtor (in a voluntary case) or by the creditors (in an involuntary case) by which opens the bankruptcy case. (There are official forms for bankruptcy petitions).


Chapter 7 – The Chapter of bankruptcy code providing for “liquidation”,(i.e., the sale of a debtor’s non-exempt property and the distribution of the proceeds to creditors)

Chapter 9 – The Chapter of bankruptcy code providing for reorganization of municipalities (which include cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts).

Chapter 11 – The Chapter of bankruptcy code providing (generally) for reorganization, usually involving a corporation or partnership. ( A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.)

Chapter 12 – The Chapter of bankruptcy code providing for adjustment of debts of a “family farmer” or a “family fisherman” as those terms are defined in the Bankruptcy Code.

Chapter 13 – The Chapter of bankruptcy code providing for debts of an individual with regular income. (Chapter 13 allows a debtor to keep a property and pay debts over time, usually three to five years.)

Chapter 15 – The Chapter of bankruptcy code dealing with cases of cross-border insolvency.

Claim – A creditor’s assertation of a right to payment from the debtor or the debtor’s property.

Confirmation – Bankruptcy judge’s approval of a  plan of reorganization or liquidation in Chapter 11, or payment plan in Chapter 12 or 13.

Consumer Debtor – A debtor whose debts are primarily consumer debts.

Consumer Debts – Debts incurred for personal, as opposed to business, needs.

Contested Matter – Those matters, other than objections to claims, that are disputed but are not within the definition of adversary proceeding contained in Rule 7001.

Contingent Claim – A claim that may be owed by the debtor under certain circumstances,e.g., where the debtor is a cosigner on another person’s loan and that person fails to pay.

Creditor – One to whom the debtor owes money or who claims to be owed money by the debtor.

Credit Counseling – Generally refers to two events in individual bankruptcy cases: (1)the “individual or group briefing” from a non profit budget and a credit counseling agency that individual debtors must attend prior to filing under any chapter of the Bankruptcy Code, and (2) the “instructional course in personal financial management” in chapters7 and 13 that an individual debtor must complete before a discharge is entered. There are exemptions to both requirements for certain categories of debtors, exigent circumstances, or if the US Trustee or bankruptcy administrator have determined that there are insufficient approved credit counseling agencies available to provide the necessary counseling.

Current Monthly Income – The average monthly income received by the debtor over the six calendar months before commencement of the bankruptcy case including regular contributions to household expenses from non-debtors and income from debtor’s spouse if the petition is a joint petition, but not including social security income and certain other payments made because the debtor is a victim of certain crimes. 11 U.S.C. 101 (10A).


Debtor – A person who has filed a petition for relief under the Bankruptcy Code.

Debtor Education – see credit counseling

Defendant – An individual (or business) against whom a lawsuit is filed.

Discharge – A release of a debtor from personal liability for certain dischargeable debts set forth in the Bankruptcy Code. ( A discharge releases a debtor from personal liability for certain debts known as dischargeable debts and prevents creditors owed those debts from taking any action against the debtor to collect the debts. The discharge also prohibits creditors from communicating with the debtor regarding the debt, including telephone calls, letters, and personal contact.)

Dischargeable Debt – A debt for which the Bankruptcy Code allows the debtor’s personal liability to be eliminated.

Disclosure Statement – a written document prepared by the chapter 11 debtor or other plan proponents that are designed to provide”adequate information” to creditors to enable them to evaluate the chapter 11 plan of reorganization.


Equity – The value of a debtor’s interest in property that remains after the liens and other creditor’s interests are considered. ( Example: If a house is valued at $100,000 and is subject to an $80,000 mortgage, there is $20,000 of equity.)

Executory Contract or Lease– Generally includes contracts or leases under which both parties to the agreement have duties remaining to be performed. (If a contract or lease is executory, a debtor may assume or reject it.)

Exemptions, exempt property – Certain property owned by an individual debtor that the Bankruptcy Code or applicable state law permits the debtor to keep from unsecured creditors. For example, in some states the debtor may be able to exempt all or a portion of the equity in the debtor’s primary residence (homestead exemption), or some or all”tools of the trade” used by the debtor to make a living (i.e.,auto tools for an auto mechanic or dental tools for a dentist).  The availability and amount of property the debtor may exempt depends on the state the debtor lives in.


Fraudulent Transfer – A transfer of a debtor’s property made with the intent to defraud or for which the debtor receives less than the transferred property’s value.

Fresh Start – The characterization of a debtor’s status after bankruptcy,i.e., free of most debts. (Giving the debtor a fresh start is one purpose of the Bankruptcy Code.)


Insider (of the individual debtor) – Any relative of the debtor or of a general partner of the debtor, partnership in which the debtor is a general partner, a general partner of the debtor, a relative of a general partner, director, officer, or person in control of the debtor.


Joint Administration – A court-approved mechanism under which two or more cases can be administered together. (Assuming no conflicts of interest, these separate businesses or individuals can pool their resources, hire the same professionals,etc.)

Joint Petition – One bankruptcy filed by a husband and wife together.


Lien – The right to take and hold or sell any property of a debtor as security of payment for a debt or duty.

Liquidation – A sale of a debtor’s property with the proceeds to be used for the benefit of creditors.

Liquidated Claim – A creditor’s claim for a fixed amount of money.


Means Test – Section 707 (b) (2) 0f Bankruptcy Code applies to a “means test” to determine whether an individual debtor’s chapter 7 filing is presumed to be an abuse of the Bankruptcy Code requiring dismissal or conversion of the case (generally to chapter13). Abuse is presumed if the debtor’s aggregate current monthly income (see definition below) is more than (i)$10,950, or (ii) 25% of the debtor’s nonpriority unsecured debt, as long as that amount is at least $6.575. The debtor may rebut a presumption of abuse only by showing of special circumstances that justify additional expenses or adjustments of current monthly income.

Motion to lift the automatic stay A request by a creditor to allow the creditor to take action against the debtor or the debtor’s property that would otherwise be prohibited by the automatic stay.


No-asset case A chapter 7 case where there are no assets available to satisfy any portion of the creditors’ unsecured claims.

Nondischargeable debt A debt that cannot be eliminated in bankruptcy. Examples include a home mortgage, debts for alimony or child support, certain taxes, debts for most government funded or guaranteed educational loans or benefit overpayments, debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs, and debts for restitution or a criminal fine included in a sentence on the debtor’s conviction of a crime. Some debts, such as debts for money or property obtained by false pretenses and debts for fraud or defalcation while acting in a fiduciary capacity may be declared nondischargeable only if a creditor timely files and prevails in a non-dischargeability action.


Objection to dischargeability A trustee’s or creditor’s objection to the debtor being released from personal liability for certain dischargeable debts. Common reasons include allegations that the debt to be discharged was incurred by false pretenses or that debt arose because of the debtor’s fraud while acting as a fiduciary.

Objection to exemptions A trustee’s or creditor’s objection to the debtor’s attempt to claim certain property as exempt from liquidation by the trustee to creditors.


Party in interest A party who has standing to be heard by the court in a matter to be decided in the bankruptcy case. The debtor, the U.S. trustee or bankruptcy administrator, the case trustee and creditors are parties in interest for most matters.

Petition preparer A business not authorized to practice law that prepares bankruptcy petitions.

Plan A debtor’s detailed description of how the debtor proposes to pay creditors’ claims over a fixed period of time.

Plaintiff A person or business that files a formal complaint with the court.

Postpetition transfer A transfer of the debtor’s property made after the commencement of the case.

Prebankruptcy planning The arrangement (or rearrangement) of a debtor’s property to allow the debtor to take maximum advantage of exemptions. (Prebankruptcy planning typically includes converting nonexempt assets into exempt assets.)

Preference or preferential debt payment A debt payment made to a creditor in the 90-day period before a debtor files bankruptcy (or within one year if the creditor was an insider) that gives the creditor more than the creditor would receive in the debtor’s chapter 7 case.

Presumption of abuse (see means test)

Priority The Bankruptcy Code’s statutory ranking of unsecured claims that determines the order in which unsecured claims will be paid if there is not enough money to pay all unsecured claims in full. For example, under the Bankruptcy Code’s priority scheme, money owed to the case trustee or for prepetition alimony and/or child support must be paid in full before any general unsecured debt (i.e. trade debt or credit card debt) is paid.

Priority claim An unsecured claim that is entitled to be paid ahead of other unsecured claims that are not entitled to priority status. Priority refers to the order in which these unsecured claims are to be paid.

Proof of claim A written statement and verifying documentation filed by a creditor that describes the reason the debtor owes the creditor money. (There is an official form for this purpose.)

Property of the estate All legal or equitable interests of the debtor in property as of the commencement of the case.


Reaffirmation agreement An agreement by a chapter 7 debtor to continue paying a dischargeable debt (such as an auto loan) after the bankruptcy, usually for the purpose of keeping collateral (i.e. the car) that would otherwise be subject to repossession.


Schedules Detailed lists filed by the debtor along with (or shortly after filing) the petition showing the debtor’s assets, liabilities, and other financial information. (There are official forms a debtor must use.)

Secured creditor A creditor holding a claim against the debtor who has the right to take and hold or sell certain property of the debtor in satisfaction of some or all of the claim.Secured debtDebt backed by a mortgage, pledge of collateral, or other liens, debt for which the creditor has the right to pursue specific pledged property upon default. Examples include home mortgages, auto loans, and tax liens.

Small business case A special type of chapter 11 case in which there is no creditors’ committee (or the creditors’ committee is deemed inactive by the court) and in which the debtor is subject to more oversight by the U.S. trustee than other chapter 11 debtors. The Bankruptcy Code contains certain provisions designed to reduce the time a small business debtor is in bankruptcy.

Statement of financial affairs A series of questions the debtor must answer in writing concerning sources of income, transfers of property, lawsuits by creditors, etc. (There is an official form a debtor must use.)

Statement of intention A declaration made by a chapter 7 debtor concerning plans for dealing with consumer debts that are secured by property of the estate.

Substantive consolidation Putting the assets and liabilities of two or more related debtors into a single pool to pay creditors. (Courts are reluctant to allow substantive consolidation since the action must not only justify the benefit that one set of creditors receives, but also the harm that other creditors suffer as a result.)

341 meeting The meeting of creditors required by section 341 of the Bankruptcy Code at which the debtor is questioned under oath by creditors, a trustee, examiner, or the U.S. trustee about his/her financial affairs. Also called creditor’s meeting.


Transfer Any mode or means by which a debtor disposes of or parts with his/her property.

Trustee The representative of the bankruptcy estate who exercises statutory powers, principally for the benefit of the unsecured creditors, under the general supervision of the court and the direct supervision of the U.S. trustee or bankruptcy administrator. The trustee is a private individual or corporation appointed in all chapter 7, chapter 12, and chapter 13 cases and some chapter 11 cases. The trustee’s responsibilities include reviewing the debtor’s petition and schedules and bringing actions against creditors or the debtor to recover property of the bankruptcy estate. In chapter 7, the trustee liquidates property of the estate and makes distributions to creditors. Trustees in chapter 12 and 13 have similar duties to a chapter 7 trustee and the additional responsibilities of overseeing the debtor’s plan, receiving payments from debtors, and disbursing plan payments to creditors.


U.S. trustee An officer of the Justice Department responsible for supervising the administration of bankruptcy cases, estates, and trustees; monitoring plans and disclosure statements; monitoring creditors’ committees; monitoring fee applications; and performing other statutory duties.

Undersecured claim A debt secured by property that is worth less than the full amount of the debt.

Unliquidated claim A claim for which a specific value has not been determined.

Unscheduled debt A debt that should have been listed by the debtor in the schedules filed with the court but was not. (Depending on the circumstances, an unscheduled debt may or may not be discharged.)

Unsecured claim A claim or debt for which a creditor holds no special assurance of payment, such as a mortgage or lien; a debt for which credit was extended based solely upon the creditor’s assessment of the debtor’s future ability to pay.


Voluntary transfer A transfer of a debtor’s property with the debtor’s consent.