Glossary
Below is a list of entries in the glossary.Click here if you would prefer to search the glossary entries.
(a) CHAPTER 7:
Simple liquidation. The debtor's assets are liquidated by the trustee. The proceeds are distributed among the creditors according to set priorities. The debtor is relieved of all existing debts (though some types of debts are exempt). Can be filed by an individual or business.
(b) CHAPTER 11:
A reorganization for non-individuals. The debtor tries to rehabilitate its financial structure. Creditors are paid according to a court-approved plan based on the type and amount of the debt.
(c) CHAPTER 13:
A reorganization for individuals with a regular source of income and limited debts. Creditors are paid according to a court-approved plan a pro-rata share of the debtor's earnings based on the type and amount of the debt.
ACCELERATION CLAUSE:
A term in a contract that allows the creditor to declare the entire amount due if the debtor defaults.
ACCORD AND SATISFACTION:
An agreement to settle a debt by partial payment. It might be presumed by negotiating a check marked "payment in full" or words to that effect.
ACCOUNT STATED:
A cause of action where the creditor sends a statement of the debtor's account to the debtor and the debtor fails to object or pay the balance due.
ACKNOWLEDGEMENT:
(1) A letter from an attorney which confirms receipt of a collection claim or legal matter. (2) A written statement by a Notary Public that a person signed a legal document.
ACTION:
A lawsuit.
ADJUDICATION:
An official ruling by a judge, usually in the form of an order or judgment.
ADMINISTRATOR:
A person appointed by the court to manage and distribute the assets of an estate when the deceased has not left a will or where an executor has not been appointed or qualified under the will.