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.