Plain-English definitions of bankruptcy terms with New York-specific context where relevant.
The automatic stay is a federal court order that takes effect the instant you file bankruptcy. It stops most collection actions including wage garnishment, foreclosure, repossession, lawsuits, and creditor calls. See 11 U.S.C. section 362.
A lawsuit within a bankruptcy case. Common examples include challenges to dischargeability of specific debts (fraud, student loans) and preference actions by the trustee.
A federal court order under 11 U.S.C. section 362 that takes effect the instant you file bankruptcy. It stops most collection actions including wage garnishment, foreclosure, repossession, lawsuits, and creditor calls. See Automatic Stay in New York.
All of your property and assets as of the filing date. The trustee administers the estate. Property protected by exemptions is removed from the estate.
Liquidation bankruptcy. A trustee sells non-exempt assets to pay creditors, and remaining qualifying debts are discharged. Takes 3-4 months. Requires passing the means test. See Chapter 7 in New York.
Reorganization for individuals with regular income. You keep your property and repay debts over a 3-5 year plan. See Chapter 13 in New York.
In Chapter 13, the stay extends to co-signers on consumer debts (section 1301). Creditors cannot collect from your co-signer while your case is active.
Court approval of a Chapter 13 repayment plan. The judge reviews whether the plan meets all legal requirements and is feasible.
Reducing a secured debt to the current value of the collateral. In Chapter 13, vehicle loans older than 910 days can be crammed down to the car's current value.
A required course you must complete within 180 days before filing. A second course (debtor education) is required after filing but before discharge. Both are available online for about $20-50 each.
A list of all your creditors with their names and mailing addresses. This is required at filing so the court can notify creditors.
The court order that eliminates your personal liability for qualifying debts. After discharge, creditors cannot collect on those debts. The discharge injunction (section 524) permanently bars collection.
Termination of a bankruptcy case without a discharge. You still owe all debts. Can be voluntary or involuntary. A dismissed case may affect future filings.
Child support, alimony, and other support obligations. These cannot be discharged and collection continues during bankruptcy.
State and federal laws that protect certain property from the bankruptcy estate. New York lets you choose between state exemptions (homestead $179,975--$215,550) and federal exemptions (homestead $27,900). See New York Exemptions.
Transferring property for less than fair value to keep it from creditors. The trustee can reverse transfers made within 2 years before filing (or longer under state law).
Protects equity in your primary residence. New York: $179,975--$215,550 by county. Federal: $27,900 (individual).
A legal claim on property as security for a debt. Liens survive bankruptcy - the discharge eliminates your personal obligation, but the lien remains on the property.
Removing a junior lien (like a second mortgage) from property when the property's value does not support it. Available in Chapter 13 in New York.
The income-based formula that determines Chapter 7 eligibility. Compares your income to the state median. New York 1-person median: $66,973. See Means Test in New York.
Required hearing where the trustee questions you under oath about your finances. Typically 5-10 minutes, about 30 days after filing. See 341 Meeting Guide.
A Chapter 7 case where the debtor has no non-exempt property for the trustee to liquidate. The vast majority of Chapter 7 cases are no-asset.
Debts that survive bankruptcy. Examples: student loans (unless undue hardship is proven), most tax debts, child support, alimony, debts from fraud, DUI judgments, and certain fines. See Debt Types.
The official document you file to begin a bankruptcy case (Official Form 101). Filing the petition creates the bankruptcy estate and triggers the automatic stay.
The document proposing how you will repay creditors over 3-5 years. Must pay priority debts in full, pay secured creditors at least the value of collateral, and pay unsecured creditors at least what they would receive in Chapter 7.
Payment of more than $600 to a creditor within 90 days before filing (or 1 year if the creditor is an insider). The trustee can recover these payments for equal distribution.
Debts that must be paid first in bankruptcy, including domestic support obligations, recent tax debts, and administrative expenses.
A form a creditor files to assert that you owe them money. The trustee reviews these claims for accuracy.
A voluntary agreement to continue paying a dischargeable debt, usually to keep collateral like a vehicle. Must be approved by the court if you are not represented by an attorney.
Paying the current value of collateral in a lump sum to keep it, even if you owe more than it is worth. Available in Chapter 7 for personal property used for personal purposes.
The detailed forms listing all your assets, debts, income, expenses, and financial transactions. Required within 14 days of filing.
Debt backed by collateral (mortgage, car loan). The lien survives bankruptcy. You must pay to keep the property.
The person appointed to administer your bankruptcy case. In Chapter 7, the trustee looks for non-exempt assets to sell. In Chapter 13, the trustee collects and distributes your plan payments.
Debt with no collateral backing it. Credit cards, medical bills, personal loans. Generally dischargeable in bankruptcy.
A Department of Justice official who oversees the bankruptcy system. Different from the case trustee. Reviews means tests and monitors for abuse.
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