1. Bankruptcy

Bankruptcy: A legal procedure for dealing with debt problems of individuals and businesses. Specifically, a petitioner asks the court to discharge the debts, so they are no longer legally required to pay them.

2. Chapters of Bankruptcy

• Chapter 7 (Liquidation): This is the most common form of bankruptcy for individuals. It involves the liquidation of non-exempt assets by a trustee to pay creditors.
• Chapter 11 (Reorganization): Often used by businesses, this allows for a reorganization to keep the business alive and pay creditors over time.
• Chapter 13 (Wage Earner's Plan): Enables individuals with regular income to develop a plan to repay all or part of their debts over time.

3. Bankruptcy Estate

Bankruptcy Estate: All legal or equitable interests of the debtor in property at the time of the bankruptcy filing. The estate technically becomes the temporary legal owner of all the debtor's property.

4. Trustee

Trustee: Appointed to manage the debtor's estate, the trustee's responsibilities include reviewing the debtor's petition and schedules, liquidating the property of the estate, and making distributions to creditors.

5. Automatic Stay

Automatic Stay: An automatic injunction that halts actions by creditors, with certain exceptions, to collect debts from the debtor who has declared bankruptcy. This can stop foreclosure, eviction, garnishment, and utility shut-offs, as well as collection calls.

6. Discharge

Discharge: The release of a debtor from personal liability for certain dischargeable debts. A discharge prevents the creditors owed those debts from taking any action against the debtor or the debtor's property to collect the debts.

7. Exemptions

Exemptions: Certain property the debtor is allowed to keep from unsecured creditors. The specifics vary by state but might include items like a primary residence, automobile, personal belongings, and retirement accounts.

8. Means Test

Means Test: A method to determine if an individual debtor's income is low enough to qualify for Chapter 7 bankruptcy. It's a formula designed to keep filers with higher incomes from filing for Chapter 7 bankruptcy.

Bankruptcy can seem like a daunting process, with various chapters and terminologies that are crucial to understand. Whether you're considering bankruptcy due to insurmountable medical bills or loss of income, or you're a lawyer advising clients on their options, understanding these terms can make the complex process more navigable. Always seek the guidance of a knowledgeable bankruptcy attorney to understand how the specifics apply to your situation, as laws and exemptions can vary greatly depending on location and individual circumstances.