CA CLS Bankruptcy key terms

Injunction that arises by operation of law when a bankruptcy petition is filed, halting most collection actions, lawsuits, foreclosures, and lien enforcement against the debtor and property of the estate.

Motion asking the court to lift the automatic stay so a creditor may pursue foreclosure, repossession, or litigation, typically granted for lack of equity, lack of insurance, or cause.

Payments or safeguards given to a secured creditor to offset depreciation of its collateral while the automatic stay blocks repossession, ensuring the creditor's interest does not erode during the case.

All legal and equitable interests of the debtor in property as of the petition date, including causes of action and contingent interests, which become subject to administration by the trustee.

Statutory allowance permitting a debtor to shield certain property, such as a homestead or tools of trade, from liquidation and administration for creditors in a bankruptcy case.

Liquidation case in which a trustee gathers and sells non-exempt assets and distributes proceeds to creditors, with the debtor generally receiving a discharge of remaining dischargeable debts.

Reorganization for individuals with regular income, featuring a three-to-five-year plan paying creditors from future earnings, often used to cure mortgage arrears and protect a home.

Reorganization case available to businesses and some individuals, in which the debtor typically remains in possession and proposes a plan restructuring debts while continuing operations.

Reorganization tailored to family farmers and fishermen, providing streamlined plan confirmation and favorable treatment of secured claims compared with a standard Chapter 11 case.

Formula comparing a debtor's income to state median figures and allowable expenses to determine whether a Chapter 7 filing is presumed abusive and should instead proceed under Chapter 13.

Official appointed to administer the estate, including liquidating assets, investigating the debtor's finances, objecting to improper claims, and distributing dividends to creditors.

Chapter 11 debtor that keeps possession of estate property and exercises the fiduciary duties and avoidance powers of a trustee, unless a trustee is appointed.

Written statement filed by a creditor setting out the amount owed and basis for the debt, which is deemed allowed unless a party in interest objects.

Right to payment, whether or not reduced to judgment, liquidated, contingent, matured, disputed, legal, equitable, secured, or unsecured, held against the debtor.

Claim backed by a lien on estate property, allowed to the extent of the value of the creditor's interest in that collateral, with any excess treated as unsecured.

Unsecured claim entitled to payment ahead of general unsecured debts under statutory ranking, covering items such as certain taxes, wages, and domestic support obligations.

Charge against or interest in property securing payment of a debt or performance of an obligation, including judicial, statutory, and consensual liens such as mortgages.

Authority of the trustee or debtor in possession to invalidate certain transfers, liens, or obligations, including preferential and fraudulent transfers, and recover the property or its value.

Ability of the estate to avoid a transfer or obligation that a hypothetical judicial lien creditor or bona fide purchaser could defeat under applicable state law as of the petition date.

Transfer to a creditor made while the debtor was insolvent shortly before filing, for an antecedent debt, that lets the creditor receive more than it would in a liquidation.

Transfer made with intent to hinder, delay, or defraud creditors, or made for less than reasonably equivalent value while the debtor was insolvent or left with insufficient assets.

Person or entity with a close relationship to the debtor, such as a relative, partner, director, or controlling person, subject to longer lookback periods for avoidance actions.

Court order releasing the debtor from personal liability for most prepetition debts, while liens generally survive and certain obligations such as taxes and support are excepted.

Obligation that survives bankruptcy, such as most taxes, domestic support, student loans absent hardship, debts from fraud, and liabilities for willful injury.

Agreement, approved by the court, in which the debtor promises to remain personally liable on a prepetition debt that would otherwise be discharged.

Right of an individual debtor to retain tangible personal property by paying the secured creditor the allowed amount of its claim or the replacement value of the collateral.

Proposed document in Chapters 11, 12, or 13 describing how claims will be classified and paid and how the debtor will fund distributions to creditors.

Court approval of a reorganization plan after finding it satisfies statutory requirements such as good faith, feasibility, and fair treatment of impaired classes.

Confirmation of a plan over a dissenting impaired class, permitted when the plan is fair and equitable and does not discriminate unfairly against that class.

Principle that a dissenting class must be paid in full before any junior class or equity holder receives anything under a cramdown plan.

Requirement that each creditor under a plan receive at least as much as it would in a hypothetical Chapter 7 liquidation as of the effective date.

Agreement under which material obligations remain unperformed by both parties, allowing the trustee or debtor to assume, reject, or assign it subject to cure and court approval.

Contract provision that alters rights, such as terminating an agreement, because of the debtor's insolvency or bankruptcy filing; generally unenforceable against the estate.

Protection in Chapter 13 that bars collection from a nonfiling individual who is liable with the debtor on a consumer debt, unless the case is dismissed or converted.

Lawsuit filed within a bankruptcy case to resolve discrete disputes such as discharge objections, lien validity, or avoidance claims, governed by formal procedural rules.

Finding that a Chapter 7 petition should be dismissed because the debtor's ability to repay creditors under Chapter 13, as shown by the means test, is abusive.

Claim not backed by a lien on estate property, receiving distribution only after secured and priority claims are satisfied and often paid a fractional dividend.

Authority to strip certain liens, such as judicial liens impairing an exemption or wholly unsecured junior liens in some circuits, restoring equity for the debtor.