Bankruptcy Glossary
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 1 2 3 4 5 6 7 8 9
Click on any glossary term to get internet search results.
Absolute Priority
The order of payment to the different classes of creditors mandated by the Bankruptcy Code. In theory, claims with higher priority are paid in full before other claims receive anything. Junior creditors and shareholders are paid after senior creditors. Specifically, the usual order is: first, administrative claims; second, statutory priority claims such as tax claims, rent claims, consumer deposits, and unpaid wages and benefits from before the filing; third, secured creditors' claims; fourth, unsecured creditors' claims; and fifth, equity claims.
Adequate Protection
The right of a party with an interest in the debtor's property (such as a secured creditor) to assurance that its interest will not be diminished during the bankruptcy proceedings.
Administrative Claim
Debt incurred by the debtor, with court approval, after the bankruptcy filing including necessary costs of preserving the estate, wages, salaries, court costs, lawyers' fees, accountants' fees, trustees' expenses, etc.
Adversary Proceeding
A lawsuit filed in the bankruptcy court which is related to the debtor's bankruptcy case. Examples are complaints to determine the dischargeability of a debt and complaints to determine the extent and validity of liens.
Allowed Claim
A claim of a creditor (or an equity interest) that is approved by the court for satisfaction under the plan of reorganization. Also known as allowed interest.
arrangement
May refer to a variety of formal or informal agreements worked out concerning the conditions under which a bankrupt company may operate; often, it refers to an extension of time in which debt can be paid off. This was the term used under old Chapter XI.
Arrears
The amount that is unpaid and overdue as of the date the bankruptcy case is filed. The word "arrears" is usually used when referring to back child support, back alimony owed, or the amount that is past due on mortgage payments (including interest and penalties).
Assets
Personal possessions of value, including cash, real estate, vehicles and investments.
Assume
An agreement to continue performing duties under a contract or lease.
Automatic Stay
An injunction that stops lawsuits, foreclosure, garnishments and all collection activity against the debtor the exact date a bankruptcy petition is filed. By filing bankruptcy in federal court, an individual or individuals can restructure or relieve themselves of debts and liabilities.
Avoidance
The Bankruptcy Code permits the debtor to eliminate (avoid) some kinds of liens that interfere with (or impair) an exemption claimed in the bankruptcy. Most judgment liens that have attached to the debtor's home can be avoided if the total of the liens (mortgages, judgment liens and statutory liens) is greater than the value of the property in which the exemption is claimed. This is sometimes called "lien stripping."
Avoidance Powers
Rights given to the bankruptcy trustee or the debtor in possession to recover certain transfers of property such as preferences or fraudulent transfers or to void liens created before the commencement of a bankruptcy case.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 1 2 3 4 5 6 7 8 9
Go to the Glossary Main Index.
