Bankruptcy Semantics

26 Mar Bankruptcy Semantics

Get help with your bankruptcy!

Get help with your bankruptcy!

Bankruptcy law is a very specialized area of the law. Like the practice of medicine, the practice of law has become increasingly specialized, and bankruptcy is one of the areas of the law that demands specialization. It is difficult, if not impossible, to maintain an acceptable level of competence without specialization. When a professional specializes, however, he or she may fall into the habit of using a specialized jargon as well. That can pose a barrier to communication with clients.

Until you need to seek the advice of a bankruptcy lawyer, there is no reason that you should be familiar with bankruptcy terminology. However, when you initially consult with a bankruptcy lawyer, you will immediately be introduced to some of those terms. Some of those terms should be explained to you as a matter of course. Your attorney should discuss the kinds of bankruptcy available to you–referred to by the chapter of the Bankruptcy Code that describes them–such as Chapter 7, Chapter 13, and so forth. Your attorney may discuss petitions, schedules, applications, motions, objections and orders. Your attorney may tell you about the Meeting of Creditors (which is a misnomer in and of itself), and may further confuse you by referring to that meeting as a “341,” which is the section of the Bankruptcy Code that requires such a meeting. Bankruptcy lawyers are prone to do that–we use the Code section or rule number as shorthand. That’s why you’ll hear us refer to “362 motions” or “2004 exams.” If your attorney sometimes forgets that you aren’t familiar with those terms, don’t hesitate to ask him to explain in plain language what he means.

Other peculiarities are more subtle. One of the terms used consistently within the Bankrutpcy Code is “transfer.” The Code uses that word as a catch-all, to describe a sale, a gift, or an involuntary transfer, like repossession or foreclosure. So, if you are filling out bankruptcy paperwork and you are asked whether you have “transferred” anything in the last two years, you are meant to disclose whether you have sold, traded, given away, lost, or surrendered anything. When asked such a question, most people don’t interpret it that broadly. It is important that you understand both the question itself, and the reason for the question, so that you can respond completely. An experienced bankruptcy attorney can provide you with that information. Similarly, you will be asked a question about “gifts” made. Would you automatically assume that the term “gift” includes charitable contributions or tithes? Within the context of the bankruptcy paperwork, it does. Similarly, the paperwork you will file with the court includes questions about “insiders.” Insiders are close family members and business associates, but you might not know that unless you ask. Most experienced bankruptcy attorneys will explain those terms, or ask the questions in such a way that their meaning will be clear.

Good communication is the key to a good attorney/client relationship, and a good relationship will help you achieve the results you expect from your bankruptcy filing. Be sure that you understand your attorney’s advice, and if he uses terminology you don’t understand, take it as a sign that he is familiar with his subject, but ask him to explain it anyway.

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Däna (pronounced "Donna") Wilkinson, has been a bankruptcy lawyer in South Carolina for 20 years. She is certified as a bankruptcy specialist by the South Carolina Supreme Court.
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