Arrearages (home mortgage) - unpaid or past due house payments; previous payments, not being the most recent, that are still due/unpaid.

Asset(s) - any property, tangible or intangible, whether of value or not; 

Asset case - case in which non-exempt assets may be used to pay debts;

Bankruptcy - a legal remedy entered into voluntarily by debtors who are financially insolvent, or incapable of paying their debts; 

Burdensome asset(s) - an asset which has burdensome or inconsequential value to the bankruptcy estate

Charge-off - the removal of a debt from the accounting records of a creditor

Code - Federal law governing bankruptcies; 

Collateral - property used to “secure” payment of a loan.

Credit Report - a report maintained by third parties that contains a financial history

Credit Score - a score used by creditors to determine whether to grant credit

Deficiency Debts (foreclosure or repossession) - the amount left owing on the debt after the collateral has been foreclosed on, or repossessed, and liquidated.  These are generally unsecured debts, and therefore, dischargeable.

Discharge - a legal release of a debtor’s obligation to pay back a debt; 

Dischargeable debts - all debts except certain non-dischargeable debts, those being recent federal income taxes, property taxes, student loans, unlisted debts, fraud debts, child support, alimony, property settlements, fines, criminal penalties, probation fees, personal injuries arising from driving under the influence, and recent credit card charges for luxury goods and services.  Most dischargeable debts are unsecured, for example, credit card and medical debts.

Dismissed - an order of judgment throwing a suit, action, motion, etc. out of the court.

Estate - the financial affairs, including, but not limited to, property, assets, and liabilities of the bankrupt.

Fair Credit Reporting Act - a federal law that grants rights to individuals regarding their credit reports and credit reporting procedures

Fair Market Value - the valuation of an item. 

Foreclosure - a legal action by the lender, of either accelerating repayment - usually in full - or repossessing the collateral, due to a deficiency in payments.

Garnishment - an action by a creditor to legally impound or seize funds from a debtor’s source of income for the repayment of debts.

Joint Case - a case in which both spouses have filed for bankruptcy.

Liabilities - debtors’ obligations, debts, of direct responsibilities on a creditor’s claim, potential or otherwise.

Lien (property) - a claim or charge on property for payment of some debt, duty or obligation.

Liquidate - the selling of property of the debtor(s) for the payment of debts.

Mortgage - a legal contract that secures payment of a debt, usually used on home and business loans;

Net Disposable Income - the income that remains after deduction for expenses that are reasonably necessary for living and for operation of debtor’s business.

No asset case - case in which debtor(s) do not possess any assets which may be used to pay debts; 

Non-Exempt Property - debtors’ property that may be liquidated or sold for the payment of debts.

Priority Claim (debts) - creditor’s claim that is legally considered to have priority over other claims.  Example: Taxes and child support.

Purchase Money Loan -a loan made by a creditor to finance the purchase of goods

Reaffirmation Agreement - an agreement between the bankrupt debtor and a secured creditor stating that the debtor will continue to keep the collateral and make regular payments on the collateral.  Reaffirmation agreements have the same legal effect of renewing a contract.

Redemption Agreement - an agreement between the bankrupt debtor and a secured creditor allowing the debtor to finish paying off the debt in one lump sum, usually for the current fair market value.

Repossession - an action taken by a secured creditor to legally take seize the collateral to be liquidated to pay the debt

Schedules - The statements and worksheets attached to a voluntary petition for relief through bankruptcy that outlines a debtor’s financial affairs, including assets, debts, exemptions, occupation, monthly income and expenditures, and other matters.

Security Agreement -  A contract to secure payment of a debt, for example, a car loan. Oftentimes, there are other stipulations included in security agreements, such as agreeing to maintain full coverage insurance on an automobile until the note is paid in full.

Secured Claims (debts) - A claims in which the creditor has an interest in the property of the debtor, or the bankruptcy estate, to secure payment of the debt.

Trustee - a court appointed official who oversees the bankruptcy estate and is charged with liquidating any property that is non-exempt, or declaring the estate to be a no asset case.

Unsecured Claims (debts) - Creditors that have no collateral securing their debt

Voluntary Surrender - an action voluntarily taken by a debtor to surrender the collateral to a secured debtor, if they do not wish to pay the debt.