35 must-know bankruptcy terms
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Fair Credit Billing Act -- Passed by Congress in 1975 to help customers resolve billing disputes with card issuers. The act requires issuers to credit payments to a customer's account the day they are received. To be protected under the law, the consumer must write to the issuer within 60 days of the mailing date on the bill with the error. The issuer is then required to investigate and either correct the mistake or explain why the bill is correct within two billing cycles. The issuer also must acknowledge a customer's complaint in writing within 30 days. Each issuer is allowed to set specific payment guidelines. If any of the guidelines are not met, the issuer can take as many as five days to credit the payment.

Fair Credit Reporting Act -- A federal law that governs what credit bureaus can report and for how long. It outlines procedures for correcting errors in credit reports. It requires credit bureaus to furnish copies of consumers' credit reports at their request.

Fair Debt Collection Practices Act -- A federal law that prohibits certain methods of debt collection, such as harassment.

Fiduciary -- An individual, company or association responsible for managing someone else's assets. Fiduciaries include executors of wills and estates, trustees, receivers in bankruptcy and those responsible for managing the finances of a minor.

Fresh start -- The characterization of a debtor's status after bankruptcy (i.e., free of most debts). Giving debtors a fresh start is one purpose of the Bankruptcy Code.

Joint Petition -- A bankruptcy petition filed by a husband and wife together.

Line of credit -- A commitment by a financial institution to lend up to a specified maximum amount to a customer during a specified period of time.

Liquidation -- A sale of a debtor's property, with the proceeds to be used for the benefit of creditors.

Nondischargeable debt -- A debt that cannot be eliminated in bankruptcy. Examples include some taxes and, usually, federally guaranteed education loans.

Notice of default -- A step in the foreclosure process in which the lender formally tells a court that the borrower is in arrears.

Reaffirmation agreement -- An agreement by a Chapter 7 debtor to continue paying a dischargeable debt after the bankruptcy, usually to keep collateral or mortgaged property that would otherwise be subject to repossession.

Redemption -- Debtors may keep exempt secured property even though they owe money on it by paying the creditor the collateral value of the property rather than the amount of the debt. Note that in some cases the "value" of the collateral may be less than the amount owed on it. In these cases it may be advantageous for the debtor to redeem the property.

Reorganization plan -- A Chapter 11 or 13 plan describing the terms by which the debtor intends to repay his debts, usually over a three- to five-year period.

Revolving credit -- A line of credit that does not have a specified repayment schedule but may require a monthly minimum payment to cover interest and contribute to paying off principal. Typical of credit card loans, checking account cash reserve or overdraft accounts that have pre-approved lines of credit.

Secured debt -- A debt that is secured by a lien on debtor's property that may be taken by the creditor in case of nonpayment by the debtor. A common example is a mortgage loan.

Unsecured claim -- A claim or debt for which a creditor holds no special assurance of payment, unlike a mortgage or lien; a debt for which credit was extended based solely upon the creditor's assessment of the debtor's future ability to pay.

Dani Arthur compiled these terms.