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Abandonment
A notice by the bankruptcy trustee that he/she has no interest in keeping certain property as part of the bankruptcy estate. Once abandonment occurs, ownership of the abandoned property reverts back to the debtor subject to any secured claims against the property. |
Actionable
Furnishing legal ground for an action. |
Adequate Protection Oder
A court order requiring the debtor to make payments to the secured creditor, while the case is pending confirmation, to assure that the creditor's equity position is not worsened. |
Affiant
The person who makes and subscribes and affidavit. |
Affidavit
A written or printed declaration or statement of facts, made voluntarily, and confirmed by oath or affirmation of the party making it, taken before a person having authority to administer such oath or affirmation. |
Agent
A formal written statement made by a defendant setting forth the grounds for his defense. |
Answer
A formal written statement made by a defendant setting forth the grounds of his/her defense. |
Appeal
To resort to a superior court to review the decision of an inferior court or administrative agency. |
Appearance
coming into court as party to a suit, either in person or by attorney, whether as plaintiff or defendant. |
Appointment of Substitute Trustee
A document required to be of record to indicate the current Trustee, if different from the one named on the original security instrument or different from the trustee who was last named. |
Appraisal
A valuation or an estimation of value of property by disinterested persons of suitable qualifications; the process of ascertaining a value of an asset or liability that involves expert opinion rather than explicit market transactions. |
Appraise
To fix or set a price or value upon. |
Arbitration
The reference of a third party to an impartial (third) person chosen by the parties to the dispute who agree in advance to abide by the arbitrator's award issued after a hearing at which both parties have an opportunity to be heard. |
Assignee
A person to whom an assignment is made; grantee. |
Assignor
One who makes an assignment. |
Automatic Stay
A bankruptcy provision that stops any act that can be construed to be an act against the interests of the debtor or the debtor's property. |
Award
To grant, concede, or adjudge to. |
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Bad debt
Uncollectible account receivable. |
Balloon Mortgage
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Beneficiary
A person who receives a benefit from certain acts such as through a will or proceeds from an insurance policy. A lender is a beneficiary with a deed of trust or a note as a security for a loan. |
Bid
An offer by an intending purchaser to pay a designated price for property which is about to be sold at auction. |
Borrower
He to whom a thing or money is lent at his request. |
BPO
Brokers Price Opinion. |
Breach
The breaking or violating of a law, a right, obligation, engagement, or duty, either by commission or omission. |
Breach of Contract
Failure to perform a contract, in whole or part, without legal excuse. |
Breach of Warranty
The failure or falsehood of an affirmative promise or statement, or the nonperformance of an executory stipulation. |
Brief
A written statement prepared by the counsel arguing the case. It contains a summary of the facts of the case, the pertinent laws, and an argument of how that law applies to the facts supporting counsel's opinion. |
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Cause
A ground for legal action. |
Chapter 11
Business reorganization under the Federal Bankruptcy Code. Chapter 11 Bankruptcies are typically filed by corporations because corporations cannot file a Chapter 13 to reorganize. Individuals also file Chapter 11 bankruptcies, especially ones who do not meet the debt limitations imposed upon the Chapter 13 debtor. The Chapter 11 plan usually pays each unsecured or under secured creditor more than it would receive under a Chapter 7 liquidation. There is no statutory limitation on how long the repayment period can be. Further, the debtor receives its discharge upon confirmation of the plan. Prior to confirmation the creditors submit written ballots to the debtor's attorney indicating whether the creditor accepts or rejects the plan. The creditors can decide on how to cast their ballots after reviewing the disclosure statement prepared by the debtor. The Disclosure Statement provides the creditors with sufficient information about the debtor's business and financial affairs to make an informed decision on how to vote on the plan. |
Chapter 12
Reorganization for farmers. Chapter 12 provides relief for family farmers whose debt limitation exceeds those for a Chapter 13 filing. It affords the family farmer an opportunity to retain possession of its farm and propose a repayment plan for its creditors. The code defines a family farmer as "an individual, or individual and spouse, engaged in farming operation whose aggregate debts do not exceed $1,500,000.00, and not less than 80% of whose debts arise out of a farming operation. Such an individual or individual and spouse must also receive more than 50% of his or their gross income from farming operation." The Chapter 12 allows the family farmer to repay his debts through a plan not to exceed five years. With the exception of the debt limitation and income requirements the Chapter 12 is similar to a Chapter 13. |
Chapter 13
Relief available under the Federal Bankruptcy Code in which a debtor retains possession of his property while making payments to creditors under a court approved plan. The Chapter 13 is usually known as a wage earner plan. Under a Chapter 13 plan of reorganization, the debtor must pay all allowed secured claims, priority claims and use his best efforts to pay a dividend to unsecured creditors. The Chapter 13 allows a wage earner to repay his debts through a plan not to exceed five years. Usually the Chapter 13 plan operates to cure a mortgage default and decelerate any accelerated loan. Chapter 13 plan will be confirmed if it is feasible and if it is the debtor's best efforts in paying his unsecured debts. |
Chapter 7
Individual or business liquidation under the Federal Bankruptcy Code where all nonexempt assets may be sold to pay creditors. It allows a debtor to get a quick discharge from his personal debt liability. However, once a debtor receives a discharge under either a Chapter 7, 11, 12 or 13 that debtor will not be eligible for a Chapter 7 discharge for another 6 years. If sufficient equity exists after the debtor's exemption in any property, a Chapter 7 Trustee endeavors to sell the property to pay all of the unsecured claims. |
Choate lien
Lien that is perfected so that nothing more need be done to make it enforceable. |
Claim
A right of payment of any kind or a right to performance that may be compensated by damages. |
Class
A group of persons, things, qualities, or activities, having common characteristics or attributes. |
Collection
Obtain payment or liquidation of a debt or claim, either by personal solicitation or legal proceedings. |
Complaint
The original or initial pleading by which an action is commenced; a written statement of the essential facts constituting the offense charged. |
Consideration
The inducement to a contract; the cause, motive, price, or impelling influence which induces a contracting party to enter into a contract. |
Consumer credit
Short term loans to individuals for purchase of consumer goods and services. |
Consumer debt
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Contract
An agreement between two or more persons that creates an obligation to do or not to do a particular thing. |
Conveyance
A claim presented by a defendant in opposition to or deduction from the claim of the plaintiff. |
Cramdown
The act of obtaining confirmation of a reorganization plan over the objection of the creditors. The effect of certain provisions of the bankruptcy code which allow the debtor to avoid the unsecured portion of an under secured claim when the under secured claim is not secured solely by the debtor's residence. Also known as lien stripping, this procedure is often used by debtors to bifurcate a creditor's claim into a secured an unsecured portion. Thereafter, the debtor will file a plan that seeks to repay only the secured portion of the creditor's claim. Once the secured portion of the claim is paid the debtor will be discharged from having to pay the unsecured portion. |
Credit bureau
Establishment that makes a business of collecting information relating to credit, character, responsibility, and reputation of individuals and businesses, for the purposes of furnishing the information (credit reports) to subscribers; the practice is regulated by federal and often state statutes. |
Credit report
A document from a credit bureau setting forth a credit rating and pertinent financial data concerning a person or a company and used by banks, merchants, suppliers and the like in evaluating a credit risk. |
Creditor
An entity with a claim arising before the filing of the bankruptcy petitions; one to whom money is owed. |
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Damages
A pecuniary compensation or indemnity, which may be recovered in the courts by any person who has suffered loss, detriment, or injury, whether to his person, property or rights, through the unlawful act or omission or negligence of another. |
Debt
A sum of money due by a certain and express agreement; a specified sum of money owing to one person from another, including not only obligation of debtor to pay but the right of the creditor to receive and enforce payment. |
Debtor
An entity that owes a debt; one who owes a debt. |
Deed
A conveyance of realty; a writing signed by a grantor, whereby title to realty is transferred from one to another. |
Deed in lieu of foreclosure
A process whereby the owner, with the approval of the lender, deeds the property to the lender to avoid foreclosure. |
Deed of Trust
An instrument taking the place and serving the uses of a mortgage, by which the legal title to real property is placed in one or more trustees, to secure the repayment of a sum of money or the performance of other conditions. It is essentially a security. |
Deed Under Power
A foreclosure deed; a conveyance deed pursuant to a non-judicial foreclosure sale granted by the holder of the security instrument under the security instrument's power of sale provision. |
Default
An omission of that which ought to be done; the omission or failure to perform a legal or contractual duty. |
Default judgment
A judgement entered in a lawsuit when a defendant has failed to enter a plea or otherwise defend himself. |
Deficiency
That part of a debt secured by a mortgage not realized from the sale of the mortgaged property. |
Demand
The assertion of a legal right; a legal obligation asserted in the courts. |
Demand for possession
The assertion of a legal right; a legal obligation asserted in the courts. |
Demand Letter
Also known as a Breach Letter or Notice of Intent to Foreclose; notice to the borrower that he/she is in "breach" of the terms of the Note and advising of the right to "cure" the default. |
Deposition
Testimony of witnesses, taken in writing, under oath or affirmation, before some judicial officer in answer to questions or interrogatories. |
Discharge
An official act of the bankruptcy court that absolves the debtor of personal liability for any pre-petition debt (except certain debts such as taxes, alimony, child support, fines, penalties, and student loans). Any unsecured debts are collectible from the debtor after the discharge order. Any secured debts may only be enforced against the collateral after the discharge. |
Disclosure Statement
Document disclosing the terms of a loan. |
Dismissal
An order or judgment finally disposing of an action, suit, motion, etc., without trial of the issues involved. |
Dismissal with Prejudice
A court order dismissing the bankruptcy case with an order prohibiting the debtor from filing another bankruptcy until the expiration of some specified time. It is an action aimed at the debtors who file multiple repetitive cases. The serial filings can be evidence of bad faith, and the debtor will be prevented from abusing the bankruptcy process for at least 180 days. Bankruptcy cases dismissed with prejudice are attempts to allow the creditor to finish a foreclosure or some other collection activity. It is rare that a good faith filing will be dismissed with prejudice. |
Dispossess
To oust from land by legal process. |
Dispossess proceedings
Summary process by a landlord to oust the tenant ad regain possession of the premises for nonpayment of rent or other breach of the conditions of the lease. |
Due Diligence
Such a measure of prudence, activity, or assiduity, as is properly to be expected from a reasonable and prudent man under the particular circumstance. |
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Ejectment
An action to restore possession of property to the person entitled to it. |
Encroachment
A fixture that illegally intrudes into or invades the property or encloses a portion of it, diminishing its width or area. |
Equity
The remaining interest belonging to one who has pledged or mortgaged his property, or the surplus of value which may remain after the property has been disposed of for the satisfaction of liens. |
Escrow Account
A bank account generally held in the name of the depositor and an escrow agent which is returnable to the depositor or paid to a third person on the fulfillment of a condition. |
Estate by the Entirety
A form of co-ownership or realty held by a husband and wife in which there is unity of estate, unity of possession, and unity of control of the entire property, and on the death of one, the survivor takes the estate under original conveyance. |
Eviction
Dispossession by process of law; the act of depriving a person of the possession of land or rental property that he has held or leased. |
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Fair Market Value
The amount at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts. |
Foreclosure Deed
A conveyance deed pursuant to a non-judicial foreclosure sale. See # 8, Deed Under Power and #27, Substitute Trustee's Deed. |
Foreclosure sale
A sale of a mortgaged property to obtain satisfaction of the mortgage out of the proceeds, whether authorized by decree of the court or by a power of sale contained in the mortgage. |
Forfeit
To lose, or lose right to, by some error, fault offense, or crime; to lose in consequence of breach of contract, neglect of duty, or offense, some right, privilege or property to another. |
Fraud
A false misrepresentation of a matter of fact, by words or conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury. |
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Garnishment
A statutory proceeding whereby person's property, money, credits in possession or under the control of, or owing by, another are applied to payment of the former's debt to third person by proper statutory process against debtor and garnishee. |
Grantee
One to whom a grant is made. |
Grantor
The person by whom a grant is made. |
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Hearing
Proceeding of relative formality, generally public, with definite issues of fact or law to be tried, in which witnesses are heard and parties proceeded against have the right to be heard. |
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Impaired Claim
A claim not paid according to its terms on the effective date of a Chapter 11 plan. |
Injunction
A judicial process requiring a person to who it is directed to do or refrain from doing a particular thing. |
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Judgment
The final decision of the court resolving the dispute and determining the rights and obligations of the parties. |
Junior lien
A lien that is subordinate to a prior lien. |
Jurisdiction
The authority by which courts and judicial officers take cognizance of and decide cases. |
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Landlord
He who, being the owner of an estate of land, or rental property, has leased it to another person. |
Lease
An agreement involving payment of rent for possession of real estate for a specific period of time. |
Lender
He from whom a thing or money is borrowed. |
Liable
Bound or obligated by law or equity; responsible; chargeable; answerable. |
Lien
A claim or charge on property for payment of some debt, obligation or duty. |
Life Estate
An estate whose duration is limited to the life of the party holding it, or some other person. |
Lock out date
Eviction date; date in which the occupant's personal property is "set out" on the curbside by the lender's labor crew. |
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Materialman's lien
A person who furnishes material for the construction, improvement, or alteration of a building or other structure has a priority for payment of his claim based on his lien as a supplier of such materials. |
Mechanic's lien
A claim created by state statutes for the purpose of securing priority of payment of the price or value of work performed and materials furnished in erecting or repairing a building or other structure, and as such, attaches to the land as well as buildings and improvements erected thereon. |
Moratorium
A term designating suspension of all or certain legal remedies against debtors. |
Mortgage
An interest in land created by a written instrument providing security for the performance of a duty or the payment of a debt. |
Motion
An application made to a court or judge for the purpose of obtaining a rule or order directing some act to be done in favor of the applicant. |
Motion Requesting Relief from Stay
A pleading filed in a bankruptcy case wherein the creditor requests that its collateral be removed from the automatic stay imposed by the bankruptcy filing. The creditor requests that the automatic stay be terminated, annulled, or otherwise modified so that the creditor can commence or continue pursuing its rights in the collateral securing the creditor's loan. Relief from the automatic stay in a Chapter 7 is usually granted if the total of the liens attached to the collateral exceed the fair market value of the collateral. In a Chapter 12 or 13 relief from the automatic stay may usually be obtained if the debtor is not making the post-petition monthly mortgage payments to the creditor. |
Motion to Dismiss
A pleading which requests that the case be dismissed prior to trial. |
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NARCA
National Association of Retail Collection Attorneys. |
Notice
Information, an advice, or written warning intended to appraise a person of some proceeding in which his interests are involved, or informing him of some fact which it is the right to know and the duty of the notifying party to communicate. |
Notice of sale
The notice of an impending foreclosure sale required by the security instrument and applicable state law. |
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Oath
An affirmation of truth of a statement, which renders one willfully asserting untrue statements punishable for perjury. |
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Partnership
A voluntary contract between two or more competent persons to place their money, effects, labor, and skill in lawful commerce or business, with the understanding that there shall be a proportional sharing of profits and loses between them. |
Perfection of Security Interest
Those steps legally required to give a secured party an interest in subject property against the debtor's creditors. |
Perjury
A false statement made under oath or equivalent affirmation, or swears or affirms the truth of a statement previously made, when the statement is material and he does not believe it to be true. |
Petition
A formal written request filed with the court requesting that something specific be done. |
Pleadings
The formal allegations by the parties of their respective claims and defenses. |
Power of Sale
A clause commonly inserted in mortgages and deeds of trust, giving the mortgagee (or trustee) the right and power, on default in the payment of the debt secured, to advertise and sell the mortgaged property at public auction (but without resorting to a court for authority), satisfy the creditor out of net proceeds, convey by deed to the purchaser, return the surplus, if any, to the mortgagor, and thereby divest the latter's estate entirely and without any subsequent right of redemption. |
Proof of Claim
An official signed statement filed in Bankruptcy court by a creditor that sets forth the amount the debtor owed the creditor as of the date the bankruptcy was filed. In order to ensure that the creditor would receive payment on its claim in a Chapter 11, 12, or 13 it must file a proof of claim with the bankruptcy court prior to the expiration of the bar date, or deadline, to file such a proof with the court. Usually in a Chapter 7 Proofs of Claim are not filed unless directed by a court to do so. In a Chapter 7 case where there are assets a Proof of Claim would be required. And in that case the Chapter 7 Trustee would liquidate the assets and distribute the proceeds. |
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Quit Claim Deed
A deed of conveyance operating by way of release; that is intended to pass any title, interest, or claim, which the grantor may have in the premises, but not professing that such title is valid, nor containing any warranty or covenants for title. |
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Reaffirmation
A binding agreement between the debtor and creditor, which, if filed with the bankruptcy court prior to the debtor's discharge, will make the creditor's claim survive the discharge. Thus, the debtor will remain personally liable for the obligation to the creditor notwithstanding the discharge (unless the debtor rescinds the Reaffirmation Agreement within 60 days after discharge enters or the date the Reaffirmation Agreement is filed with the Court). |
Recovery
The obtaining of a thing by the judgment of a court, as the result of an action brought for that purpose. |
Reinstatement
To bring back or restore a past-due loan to a current status. |
Rent
Compensation or fee paid, usually periodically, for the use of any property, land, buildings, equipment, etc. |
Restrictive Covenant
Provision in a deed limiting the use of the property and prohibiting certain uses. |
Right of redemption
The right to disencumber property or free it from a claim or lien; specifically, the right to free property from the encumbrance of a foreclosure or other judicial sale, or to recover the title passing thereby, by paying what is due, with interest, costs, etc. |
Right of Survivorship
The right of a survivor of a deceased person, to the property of said deceased. |
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Secured creditor
A creditor holding a claim against the bankruptcy estate for which collateral has been pledged to assure payment of the debt. |
Secured loan
A loan for which some form of property has been pledged or mortgage. |
Security Interest
A form of interest in property that provides that the property may be sold on default in order to satisfy the obligation for which the security interest is given. |
Service of process
The delivery of a writ, summons, and complaint, criminal summons, notice, order, etc., by an authorized person, to a person who is thereby officially notified of some action or proceeding in which her is concerned, and is thereby advised or warned of some action or step which he is commanded to take or to forbear. |
Special Warranty Deed
A deed in which the grantor only covenants to warrant and defend the title against claims and demands of the grantor and all persons claiming by, through and under him. |
Substitute Trustee's Deed
A conveyance deed pursuant to a non-judicial foreclosure sale under a Deed of Trust. |
Summary judgment
Rule permitting any party to a civil action to move for a summary judgement on a claim, counterclaim, or cross-claim when he believes that there is no genuine issue of material fact and that he is entitled to prevail as a matter of law. |
Summary process
Such as is immediate or instantaneous, in distinction from the ordinary course, by emanating and taking effect without intermediate applications or delays; term used to describe action for eviction of a tenant. |
Summons
Instrument used to commence a civil action or special proceeding and is a means of acquiring jurisdiction over a party. |
Survey
The process by which a parcel of land is measured and its boundaries and contents ascertained; also a map, plat or statement of the result of such a survey, with the courses and distances and quantity of the land. |
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Tax Lien
A lien on real estate in favor of a state or local government that may be foreclosed for the non-payment of taxes. |
Tenant
One who holds lands of another. |
Tenant at sufferance
One who after rightfully being in possession of rented premises continues after his right has terminated. He has no estate nor title but only naked possession without right and wrongfully stands in no privity to landlord and is not entitled to notice to quit, and is bare licensee to whom landlord owes merely duty not to wantonly nor willfully injure him. |
Tenant at will
One who holds possession of premises by permission of owner or landlord, but without fixed term. Where lands or tenements are let by one man to another, to have and to hold to him at the will of the lessor, by force of which lease the lessee is in possession. |
Third Party
The purchaser, other than the investor, of a property at a foreclosure sale. |
Trespass
An unlawful interference with one's person, property or rights. |
Trespasser
One who intentionally and without consent or privilege enters another's property. |
Trustee
One who holds the legal title to property for the benefit of another as security for performance of an obligation. |
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UCC
Uniform Commercial Code; uniform laws drafted by the National Conference of Commissioners on Uniform State Laws governing commercial transactions. |
Unlawful detainer
The unjustifiable retention of the possession of lands by one whose original entry was lawful and of right, but whose right to the possession has terminated and who refuses to quit, as in the case of a tenant holding over after the termination of the lease and in spite of a demand for possession by the landlord. |
Unsecured debt
Debt not secured by collateral. |
Upset bid
A bid made after a judicial sale, but before the successful bid at the sale has been confirmed, larger or better than such successful bid, and made for the purpose of upsetting the sale and securing to the "upset bidder" the privilege of taking the property at his bid or competing at a new sale. |
Upset price
A bid made after a judicial sale, but before the successful bid at the sale has been confirmed, larger or better than such successful bid, and made for the purpose of upsetting the sale and securing to the "upset bidder" the privilege of taking the property at his bid or competing at a new sale. |
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Vacate
To render an act void; to make vacant or empty. |
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Warranty Deed
Deed in which the grantor warrants good clear title. |
Writ
An order issued from a court requiring the performance of a specified act, or giving authority to have it done. |
Writ of execution
A court order authorizing an official to execute a decision such as eviction of a tenant or selling property. |
Writ of possession
Document issued by a court directing the sheriff or other appropriate official to deliver possession of real property. |
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Glossary