Bankruptcy terms you should understand - Part 2
Here are 5 more bankruptcy terms you should be familiar with if you are thinking of filing for bankruptcy.
Estate - The total of all of the property owned by a person who has died
Exempt Property - Possessions that a person may keep when they file for Chapter 7 bankruptcy or lose a lawsuit to a creditor. Typically, these items are clothing, vehicles worth less than $2500, household furnishings and Social Security payments.
Foreclosure - When the mortgage on a property is in default, the property is sold to raise money to pay the unpaid balance of the loan to the creditor. The person who has defaulted on the loan is forced to leave the property
Lien - A legal claim against a property made by a creditor because of a debt owed by the property owner. The lien must be paid when the property is sold. There are liens called security interests which the property owner agrees to in order to guarantee repayment of a loan they have taken out such as a home, auto or personal loan. There are also nonconsensual loans to which the property owner did not agree such as judgement liens, tax liens and mechanical liens.
Nonexempt property - Possessions that a person may lose when they file for Chapter 7 bankruptcy or lose a lawsuit to a creditor. These are typically items that are valuable enough to satisfy debts such as vehicles that are paid for, valuable furs, electronic equipment, and the equity in your home.
This entry was posted on Thursday, April 24th, 2008 at 9:09 am and is filed under Filing Bankruptcy, Bankruptcy Tips.
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