Bankruptcy terms you should understand – Part 1

When you are filing for bankruptcy, there are a few terms you should understand. I’ll cover 5 in this post and 10 more in subsequent posts.

Assignee – A person or company to whom property rights are transferred. For example, an assignee may take over the lease on an apartment if the original tenant wants to leave before his lease is up. The assignee will assume all the rights to the property as the tenant including the responsibility to pay the rent and utilities, but would not be the one legally responsible if they failed to keep up their end of the bargain. The original tenant is still the responsible party legally.

Beneficiary – A person or group who is entitled to receive benefits from a legal device such as a will, trust or an insurance policy. A beneficiary can also be the person who receives the benefits of a contract between two other people.

Cash Surrender Value – On the voluntary termination of an insurance policy, the amount of money available before the policy’s benefits become payable. In other words, the amount of money you would get if you sold the policy back to the insurance company.

Co Signer – A person who signs a loan document, lease or credit application as a secondary borrower agreeing to be responsible for the debt if the primary borrower does not make the agreed payments.

ERISA – The Employee Retirement Income Security Act is a federal law that regulates private pension plans that are supplementing Social Security. ERISA requires employers to provide employees with full information regarding their pension rights, sets minimum standards for these plans, ensures that the administration of these funds is clear to the employees, and provides some protection for workers if the plan cannot pay the benefits that they were entitled to.

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