AUGUST 24, 2026

Legal English Vocabulary: Key Terms in Bankruptcy Law
This week's Ingleslegal vocabulary focuses on bankruptcy law, the body of federal law that governs how individuals and businesses in financial distress can resolve their debts. These terms are indispensable for bilingual legal professionals assisting clients who are considering filing for relief from overwhelming debt in the United States.
1. Chapter 7
Meaning: A form of bankruptcy, often called "liquidation," in which a trustee sells the debtor's non-exempt assets to pay creditors, after which most remaining debts are discharged.
Equivalent English expressions: Liquidation bankruptcy, straight bankruptcy
Spanish equivalent: Capítulo 7 / Bancarrota de liquidación
Law branches: Bankruptcy Law, Civil Procedure
Example: "He filed for Chapter 7 after losing his job, and his credit card debt was discharged within four months."
2. Chapter 13
Meaning: A form of bankruptcy that allows an individual with regular income to reorganize debts and repay them, in whole or in part, through a court-approved repayment plan.
Equivalent English expressions: Wage earner's plan, reorganization bankruptcy
Spanish equivalent: Capítulo 13 / Plan de reorganización de deudas
Law branches: Bankruptcy Law
Example: "Her Chapter 13 plan allowed her to keep her house while repaying her mortgage arrears over five years."
3. Debtor
Meaning: An individual or business that owes money to another party and who files for bankruptcy protection to resolve that debt.
Equivalent English expressions: Filer, bankrupt party
Spanish equivalent: Deudor
Law branches: Bankruptcy Law, Contract Law
Example: "The debtor listed all outstanding balances on the bankruptcy petition."
4. Creditor
Meaning: A person, bank, or business to whom money is owed and who has a legal claim against the debtor's assets.
Equivalent English expressions: Lender, claim holder
Spanish equivalent: Acreedor
Law branches: Bankruptcy Law, Contract Law, Commercial Law
Example: "Each creditor received a notice of the bankruptcy filing and a deadline to submit a claim."
5. Discharge
Meaning: A court order that releases the debtor from personal liability for certain debts, meaning creditors can no longer attempt to collect them.
Equivalent English expressions: Debt discharge, release of debt
Spanish equivalent: Condonación de deuda / Descargo de deuda
Law branches: Bankruptcy Law
Example: "The court granted a discharge of all his unsecured debts, including medical bills."
6. Automatic Stay
Meaning: An injunction that immediately stops most creditors from pursuing collection actions, lawsuits, or foreclosures once a bankruptcy petition is filed.
Equivalent English expressions: Stay of proceedings, collection freeze
Spanish equivalent: Suspensión automática de cobros
Law branches: Bankruptcy Law, Civil Procedure
Example: "The automatic stay halted the foreclosure sale scheduled for the following week."
7. Trustee
Meaning: A court-appointed official responsible for overseeing a bankruptcy case, reviewing the debtor's assets, and distributing payments to creditors.
Equivalent English expressions: Bankruptcy trustee, estate administrator
Spanish equivalent: Síndico / Fiduciario concursal
Law branches: Bankruptcy Law
Example: "The trustee sold the debtor's second vehicle to pay a portion of the outstanding debts."
8. Exemptions
Meaning: Specific categories of property that a debtor is legally allowed to keep, protected from liquidation during bankruptcy proceedings.
Equivalent English expressions: Exempt property, protected assets
Spanish equivalent: Bienes exentos / Exenciones
Law branches: Bankruptcy Law
Example: "Thanks to state homestead exemptions, she was able to keep her primary residence."
9. Reaffirmation Agreement
Meaning: A voluntary agreement in which a debtor agrees to remain liable for a specific debt, such as a car loan, despite filing for bankruptcy.
Equivalent English expressions: Debt reaffirmation, reaffirmation contract
Spanish equivalent: Acuerdo de reafirmación de deuda
Law branches: Bankruptcy Law, Contract Law
Example: "He signed a reaffirmation agreement to keep making payments on his car and avoid repossession."
10. Means Test
Meaning: A financial calculation comparing a debtor's income to the state median income, used to determine eligibility for Chapter 7 bankruptcy.
Equivalent English expressions: Income eligibility test
Spanish equivalent: Prueba de medios económicos
Law branches: Bankruptcy Law
Example: "She passed the means test, confirming her income qualified her to file under Chapter 7."
Bankruptcy proceedings move through distinct stages, and knowing the English terms for each one helps bilingual professionals guide clients clearly through a stressful process. We will be back next week with ten more essential legal English terms.

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