Bankruptcy Debt Glossary

Automatic Stay – an injunction that will stop lawsuits, wage garnishments, foreclosures, and collections activity against the person / debtor, once they have filed the bankruptcy petition.

Adversary Proceeding - Litigation within a bankruptcy proceeding instituted by the filing of a complaint.

Post-petition - Any activity or event occurring after the filing of a petition.

Preference - A payment by a debtor made during a specified period (90 days or one year) prior to the filing that favors one creditor over others.

Straight Bankruptcy - An informal term for a Chapter 7 bankruptcy or liquidation; used more commonly to describe liquidation before the bankruptcy

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Small Claims - Also sometimes called convenience claims - under a plan of reorganization or liquidation, claims that are small (e.g. in the hundreds or thousands of dollars range) and numerous are often grouped into a single class and settled for cash for administrative convenience.

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