Exempt
Property that is exempt is removed from the bankruptcy estate and is not available to pay the claims of creditors. The
debtor selects the property to be exempted from the statutory lists of exemptions available under the law of his state.
The debtor gets to keep exempt property for use in making a fresh start after bankruptcy.
Exemptions
Exemptions are the lists of the kinds and values of property that is legally beyond the reach of creditors or the
bankruptcy trustee. What property may be exempted is determined by state and federal statutes, and varies from state
to state.
Fiduciary
One who is entrusted with duties on behalf of another. The law requires the highest level of good faith, loyalty and
diligence of a fiduciary, higher than the common duty of care that we all owe one another. The debtor in possession in
a Chapter 11 is a fiduciary for the creditors, owing loyalty to the creditors and not the shareholders of the debtor.
Fair Market Value
The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not
compelled to sell, would accept. Foreclosure: The legal process by which a borrower in default under a mortgage is
deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public
auction with the proceeds of the sale being applied to the mortgage debt.
Garnishment
A court-ordered method of debt collection in which a portion of a person's salary is paid to a creditor. The process by
which a judgment creditor seizes money, which is owed to his judgment debtor, from a third party known as a garnishee.