Boca Raton Bankruptcy Attorneys

Bankruptcy Terms You Should Know

Chapter 7 Bankruptcy – A type of bankruptcy in which the debtor asks the court to dismiss most or all of his or her unsecured debts. May involve the selling off of certain assets to compensate creditors.

Chapter 13 Bankruptcy – A type of bankruptcy in which the debtor works out and submits a repayment plan to the court. People who are ineligible for Chapter 7 bankruptcy may still be able to file a Chapter 13 petition.

Secured debt – A debt which is linked to a specific piece of property by a lien. If you default on a secured debt, the creditor can initiate repossession or foreclosure proceedings in order to take the collateral property as payment for the unpaid debt.

Unsecured debt – Debts, such as credit cards, which are not tied to any particular item or asset. Defaulting on unsecured debts will not grant a creditor the right to seize your property.

Lien – The right of a creditor to take your property if you default on a loan or debt. Loans such as mortgages or car loans will establish liens. Liens may also be established by the judgment of a court.

Creditor – Someone to whom a debt is owed by a debtor.

Debtor – A person who owes a debt to another party.

Collateral – Property on which a lien is placed in order to guarantee that a debtor will fulfill his or her financial obligations in the case of a secured debt.

If you are in financial trouble and need a way to get back on your feet, bankruptcy may be a viable option. To learn more, call Boca Raton bankruptcy lawyer Eric N. Klein & Associates at 561-353-2500 today.