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Default
The failure by an entity to abide by the covenants in a debt obligation or other agreement to which it is a party. The most common default is non-payment of interest or principal.
Bankruptcy Court
The federal tribunal where cases under the Bankruptcy Code are litigated.
Disclosure statement
A comprehensive disclosure document sent to creditors when they are asked to vote on a plan of reorganization in Chapter 11.
Forbearance and Repayment
The most common way of resolving a loan default is to work out a plan which will let you repay part of the delinquency each month, along with you regular monthly installment.
Chapter Twenty Two
An unofficial term describing a company that has filed for Chapter 11 twice.
Debtor
The entity seeking protection from creditors under the bankruptcy laws.
Reamortization
If your loan is reamortized, the delinquency is added to the loan balance in order to bring your payments up to date. This increases your loan amount and will also increase your monthly payments.
Chapter Thirty Three
An unofficial term describing a company that has filed for Chapter 11 three times.
Asset
An economic resource or item owned by a business that is expected to benefit its future operations.
Absolute priority
The order of payment to the different classes of creditors mandated by the Bankruptcy Code. In theory, claims with higher priority are paid in full before other claims receive anything
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