5
503(b)(9) Claim
A 503(b)(9) claim is a bankruptcy administrative expense claim for the value of goods a debtor received in the ordinary course of business within 20 days before it filed bankruptcy.
A
Account Stated
Account stated is a legal claim that a debtor owes a specific balance because the creditor sent a statement of the account and the debtor accepted it or failed to object within a reasonable time.
Accounts Receivable Aging
Accounts receivable aging is a report that groups a company's unpaid customer invoices by how many days they are past the invoice or due date, usually in 30-day buckets.
Acknowledgment of Debt
An acknowledgment of debt is a statement by a debtor business, often made in writing and signed, admitting that it owes a particular balance to a creditor.
Automatic Stay
The automatic stay is a court order that takes effect immediately when a bankruptcy petition is filed, stopping most efforts by creditors to collect pre-bankruptcy debts from the debtor or its property.
B
Bad Debt Write-Off
A bad debt write-off is the accounting step of removing a receivable a business no longer expects to collect from its books and recording it as a loss or expense.
Bank Levy
A bank levy is a court-authorized process in which a judgment creditor has funds in a debtor's bank account frozen and turned over to satisfy a judgment.
BMC-84 Bond
A BMC-84 bond is a surety bond that a freight broker files with the Federal Motor Carrier Safety Administration to show financial responsibility and to secure payment of claims by carriers and shippers.
Breach of Contract
Breach of contract is the failure of a party to perform a promise in a legally enforceable agreement, such as a customer failing to pay for goods or services it agreed to buy.
C
Collection Agency Trust Account
A collection agency trust account is a bank account in which an agency holds money collected on behalf of its clients, kept separate from the agency's own operating funds until remitted.
Contingency Fee
A contingency fee is a payment arrangement where a collection agency or attorney earns a percentage of the money actually recovered and is paid nothing if nothing is collected.
Credit Application
A commercial credit application is the form a business customer completes to request trade credit, providing company details and usually agreeing to the seller's terms and conditions of sale.
D
Days Sales Outstanding (DSO)
Days sales outstanding, or DSO, is a measure of the average number of days a company takes to collect payment after making a sale on credit terms.
Debtor Examination
A debtor examination is a post-judgment proceeding in which a judgment debtor, or its officer, must appear and answer questions under oath about its income, assets, accounts, and property.
Default Judgment
A default judgment is a court judgment entered in favor of the plaintiff because the defendant failed to file an answer or otherwise respond to the lawsuit within the time allowed.
Demand Letter
A demand letter is a formal written request from a creditor, collection agency, or attorney asking a debtor to pay a past-due balance by a specific date.
Domestication of Judgment
Domestication of a judgment is the process of registering a judgment obtained in one state's court in another state so it can be enforced against the debtor's assets there.
G
Garnishment of Receivables
Garnishment is a court process in which a judgment creditor directs a third party that owes money to the debtor, such as a customer or bank, to pay that money to the creditor instead.
J
Judgment Lien
A judgment lien is a lien on a debtor's property, usually real estate, that a creditor obtains by recording or filing a court judgment in the manner required by state law.
L
Late Payment Interest
Late payment interest is a charge a creditor adds to an overdue invoice, calculated as a percentage of the unpaid balance for the time it remains past due.
M
Mechanic's Lien
A mechanic's lien is a statutory lien that allows contractors, subcontractors, and suppliers who improve real property to claim a security interest in that property if they are not paid.
Miller Act
The Miller Act is a federal law requiring prime contractors on most federal construction contracts above a set dollar amount to post payment and performance bonds protecting subcontractors and suppliers.
N
Net 30 Terms
Net 30 terms are payment terms requiring the buyer to pay the full invoice amount within 30 days of the invoice date, or another agreed starting point such as delivery.
O
Open Account
An open account is a credit arrangement in which a seller provides goods or services on an ongoing basis and bills the buyer later, with a running balance tracked over time.
P
Pay-When-Paid Clause
A pay-when-paid clause is a subcontract term stating that the general contractor will pay the subcontractor within a set time after the contractor is paid by the owner.
Payment Bond
A payment bond is a surety bond posted by a contractor that guarantees payment to subcontractors and suppliers who furnish labor or materials to a construction project.
Payment Plan and Acceleration Clause
An acceleration clause is a contract term allowing a creditor to declare the entire remaining balance of an installment debt or payment plan immediately due if the debtor defaults.
Personal Guarantee
A personal guarantee is a written promise by an individual, usually an owner or officer, to pay a business's debt personally if the business itself fails to pay.
Preference Payment
A preference payment is a transfer a debtor made to a creditor on an existing debt shortly before filing bankruptcy that a trustee or debtor in possession may be able to recover for the estate.
Prejudgment Interest
Prejudgment interest is interest awarded by a court on a money claim for the period between when the debt became due and when judgment is entered.
Preliminary Notice
A preliminary notice is a written notice that a subcontractor or supplier sends early in a construction project to the owner and others, often required to preserve mechanic's lien or bond rights.
Promissory Note
A promissory note is a signed written promise by one party to pay a specific sum of money to another, either on demand or on stated dates, often with interest.
Proof of Claim
A proof of claim is a written statement, usually on Official Form 410, that a creditor files in a bankruptcy case to set out the amount and basis of what the debtor owes it.
R
Registered Agent
A registered agent is the individual or company that a business entity designates with the state to receive service of process, lawsuits, and official government notices on its behalf.
Retainage
Retainage is a portion of each progress payment, typically a percentage, that an owner or contractor withholds until a construction project or a contractor's scope of work is finished.
S
Secretary of State Filing
A Secretary of State filing is a public record kept by a state's business filing office showing a business entity's formation, legal name, status, registered agent, and later changes.
Secured Creditor
A secured creditor is a creditor whose claim is backed by a lien or security interest in specific property of the debtor, giving it rights to that collateral if the debt is not paid.
Settlement and Accord and Satisfaction
Accord and satisfaction is a legal doctrine under which a creditor and debtor agree to settle a claim for a different payment, and the debt is discharged once that payment is made.
Skip Tracing
Skip tracing is the process of locating a debtor that has moved, closed, changed names, or stopped responding, along with its owners, new locations, or assets.
Statute of Limitations
A statute of limitations is a law setting the maximum time a creditor has to file a lawsuit to collect a debt, after which the debtor can usually have the claim dismissed.
U
UCC-1 Financing Statement
A UCC-1 financing statement is a public filing that gives notice that a creditor claims a security interest in specified personal property of a debtor, such as inventory, equipment, or receivables.
Unsecured Creditor
An unsecured creditor is a creditor whose claim is not backed by any lien or security interest in the debtor's property, relying only on the debtor's promise to pay.