Lawyers and the courts use a lot of legalese, confusing words, and lingo during the bankruptcy process. The following is a brief definition of some of the words we use during a bankruptcy.
The “Debtor” this is the person or company who owes money, can’t afford to pay his/her debts, and who files bankruptcy.
A “Creditor” is any person, business, or government to whom money is owed by the debtor. An “Unsecured Creditor” is a creditor who DOES NOT have any collateral supporting the loan. For example, credit cards, medical bills, former landlords, cell phone companies, cable company, etc. A “Secured Creditor” is a creditor who DOES have collateral supporting the loan – for example, a mortgage lender, or a loan on a vehicle.
Think of the “Trustee” as a referee who oversees your case. The Trustee is an employee of the US Department of Justice. The Trustee’s job is to be sure that both debtors and creditors are treated fairly during the bankruptcy. If you hire a lawyer to help you with your bankruptcy, you will not have much direct interaction with the Trustee. Your lawyer will communicate with the Trustee on your behalf. Typically, the only interaction you have with the Trustee is during your “341 meeting” – the meeting of creditors.
In a Chapter 13 bankruptcy, “The Plan” is a document your lawyer drafts that explains to the Court, the creditors, and the Trustee how you want to pay your debts and how much you intend to pay.
The meeting of creditors is also called the “341 meeting.” In Phoenix, Arizona, this meeting will take place about 5 weeks after your attorney files your bankruptcy. Your attorney will go to the meeting with you. You will meet with the bankruptcy trustee at this meeting. The bankruptcy trustee will ask you several questions under oath, and it will take about 5 to 10 minutes. Most of the questions are very simple. See our blog on questions the bankruptcy trustee might ask you.