Bankruptcy Terminology

What is Chapter 7?

Also known as a straight or liquidation bankruptcy, a Chapter 7 bankruptcy is often seen as a last resort where a court-appointed trustee takes ownership of all of a debtor’s non-exempt assets, sells the assets, and distributes the proceeds to the appropriate creditors.

What is Chapter 11?

Commonly known as a reorganization bankruptcy, cases filed under Chapter 11 are often very complex and expensive. In these cases, a debtor will usually propose a reorganization plan that typically allows it to continue operating while fulfilling debts. It is often large businesses that file for these bankruptcies.

What is Chapter 13?

A Chapter 13 bankruptcy is also referred to as a wage earner’s plan. These bankruptcies allow individuals with enough income to create a repayment plan that can last from three to five years.

What is Chapter 15?

Cases filed under Chapter 15 are international and aim to resolve bankruptcies that involve parties in more than one country. These cases are typically considered ancillary as they are generally filed in addition to a primary proceeding taking place in the foreign debtor’s country.

What is a Lien?

A lien is a legal right to take possession of assets belonging to a debtor until the repayment of their loan is satisfied. If the repayment is not fulfilled, the debtor’s assets may be seized by the creditor.

What is a Replevin?

A replevin is a legal action in which the plaintiff recovers possession of unlawfully withheld personal property, as well as any damages incurred during the period of detention.

What is a Foreclosure?

A foreclosure is a legal process that occurs when a borrower fails to make their proper payments and the lender takes possession of and sells the asset in question.

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