Consumer Law Dictionary

Consumer law encompasses many areas including bankruptcy, debt collection, and foreclosure. This dictionary provides a plain meaning of common terms used in this area of law.

341 Meeting – also called the “meeting of creditors.” Each debtor filing bankruptcy must attend a 341 meeting, where the debtor swears, under oath, that everything contained in the bankruptcy petition is true.
Arrears – the total amount of past due payments on a loan, including late fees.
Chapter 7 – a chapter 7 bankruptcy liquidates the assets of the debtor in exchange for a discharge of most debts. file5581281481565
Chapter 13
– a chapter 13 bankruptcy creates a payment plan where debtors repay their debts over a period of time, usually 3-5 years.
Complaint – a civil complaint initiates a civil lawsuit by setting forth for the court a claim for relief from damages caused, or wrongful conduct engaged in, by the defendant.  The complaint outlines all of the plaintiff’s theories of relief, or causes of action (e.g. Negligence, Battery, assault), and the facts supporting each Cause of Action.  The complaint also serves as notice to the defendant that legal action is underway.
Consumer – a consumer is a person that buys goods or services.
Creditor – a person or company that is owed a debt. For example, credit card companies are typically creditors.
Debt Collector – a company that collects debts owed to another.
Debtor – a debtor is a person who owes a debt.
Default Judgment – in this context, a judgment in favor of the creditor when the consumer fails to respond to a complaint.
Defendant – the person being sued.
Exemptions – personal property, up to a certain dollar amount, is exempted by the Bankruptcy Code and cannot be sold by the trustee. This can include household goods, clothing, etc.
Foreclosure – occurs when the bank sells the home after the homeowner defaults on their mortgage payments.
Insolvent – a person is insolvent when what they owe is more than what their assets are worth.
Lien – the right to take and/or sell the property of a debtor as security or payment for a debt. Mortgages and car loans typically have liens.
Liquidation – a sale of the debtor’s assets for the benefit of creditors.
Loan Modification – changes the terms of the mortgage loan agreement, usually to lower the homeowner’s monthly payment.
Means Test – a test using the debtor’s income to determine if the debtor can file a chapter 7 bankruptcy. Debtors with higher incomes may not be able to file a chapter 7.
Mortgagor – the borrower, or homeowner, in a mortgage loan.
Mortgagee – the lender or beneficiary that owns the mortgage loan. Who the homeowner sends their mortgage payments to is not necessarily the mortgagee.
Nondischargeable Debt – debt that cannot be discharged in bankruptcy. This generally includes tax debt, student loans, and domestic support obligations.
Plaintiff – the person bringing a lawsuit.
Pro se – a party is “pro se” if he or she is representing themselves (as opposed to being represented by an attorney) in a lawsuit.
Secured Debt – debt backed by a lien. For example, mortgages are secured debt because the mortgagee can take possession of a house if the homeowner does not make their mortgage payments.
Servicer – the company that a homeowner pays their monthly mortgage payments to. This is not necessary the beneficiary (mortgagee) of the loan.
Setoff – when each party owes something to the other, offset applies. For example, if A owes B $20 and B owes A $10, the money would offset, and B would only owe A $10, and A would owe B $0.
Summons – a legal document that puts the defendant on notice of the lawsuit.
Trustee – in bankruptcy, the trustee is a private individual or corporation that oversees the bankruptcy.
Underwater – when a property is worth less than what is owed on it.
Unsecured Debt – debt that is not subject to a lien. Credit cards are typically unsecured debt.

Disclaimer: The information provided on Debt Chat is for educational and advertisement purposes only and thus, should not be construed to be legal advice or the formation of an attorney/client relationship. Because each individual’s circumstance and needs are different, you are encouraged to consult with an attorney licensed in your state.

Disputed, Unliquidated, Contingent – Oh My!

When you file for bankruptcy, you must list all your debts on your bankruptcy petition. The amount of most debts is easily determined by looking at a billing statement or credit report.Glossary of Terms Blog Pic However, if you do not agree with the amount listed on a bill or if you have not had to start making payments on a debt, you must list on your bankruptcy petition whether the debt is disputed, contingent, or unliquidated.

Disputed: Debt is disputed if you and the creditor do not agree on the amount you owe. For example, if you say that a friend gave you a personal loan of $100, but she says that you actually owe her $200, the debt should be listed as disputed.

Unliquidated: Debt is unliquidated when the debt exists, but the exact amount of the debt has not been determined yet. For example, if you were sued in a car accident and the court finds you to be at fault but has not yet awarded damages, any debt resulting from that lawsuit would need to be listed as unliquidated.

Contingent: Debt is contingent if it depends on some event that has not happened yet. For example, if you co-signed a loan for your daughter, you typically will not make any payments unless your daughter defaults on the loan. However, even if default has not happened, you can list the loan as contingent and have your liability discharged.

If you are unsure what type of debt you have, speaking with an experienced bankruptcy attorney can help you determine how to list it on your petition.

Disclaimer: The information provided on Debt Chat is for educational and advertisement purposes only and thus, should not be construed to be legal advice or the formation of an attorney/client relationship. Because each individual’s circumstance and needs are different, you are encouraged to consult with an attorney licensed in your state.

What is Debt Chat?

Debt Chat is the blog site of Antoinette M. Davis Law, PLLC and your one stop shop for consumer debt issues. It aims to provide a reliable, easy to understand educational resource for all kinds of debt related questions and topics. Dealing with debt can be overwhelming and intimidating, however, leveraging the tools you need to deal with debt collectors, manage a budget or prepare to file for bankruptcy can help to empower you to take the steps towards a debt-free future.

Debt Chat is a space where attorneys and financial experts offer practical and strategic solutions designed to help consumers become knowledgeable and aware of how to get out – and stay out – of debt. Debt Chat also offers answers to frequently asked questions on debt solutions, consumer rights and bankruptcy because even when dealing with debt, knowledge is power.

Disclaimer: The information provided on Debt Chat is for educational and advertisement purposes only and thus, should not be construed to be legal advice or the formation of an attorney/client relationship. Because each individual’s circumstance and needs are different, you are encouraged to consult with an attorney licensed in your state.