Bankruptcy Glossary

Glossary of Bankruptcy Law Terms

Legal Glossaries Index Page

Party-in-interest: May includes the debtor, the trustee, a creditors' committee, an equity security holders' committee, a creditor, an equity security holder, or any indenture trustee.

Permanent injunction: Extinguishing the debtor's personal liability on dischargeable debts, through the granting of a permanent injunction protecting the debtor from efforts to collect such debts as a personal liability. 

Plan: A detailed description of how the debtor proposes to pay creditors' claims over a fixed period of time.

Preferential lien: A lien obtained under circumstances which make it a preferential payment or transfer and subject to being avoided. 

Prepackaged bankruptcy: Before filing a bankruptcy case debtor and creditors may have negotiated an agreed upon plan of reorganization. The bankruptcy petition can then be filed and the plan confirmed with much less time and expense.

Present value: The present value of a future amount adjusted to account for inflation.

Priority: The Bankruptcy Code's statutory ranking of unsecured claims that determines the order in which unsecured claims will be paid if there is not enough money to pay all the claims in full. 

Proof of claim: The official form prescribed by the Bankruptcy Rules by which a creditor files his claim or evidence of debt in a bankruptcy case.

Property of the estate: The commencement of a bankruptcy case creates an "estate." The estate technically becomes the temporary legal owner of all of the debtor's property. Generally speaking, the debtor's creditors are paid from nonexempt property of the estate. 

Purchase money security interest: A security interest in property, to the extent that it secures credit given to the debtor for the purpose of acquiring the property and actually used by the debtor for that purpose.