We use cookies to improve security, personalize the user experience,
enhance our marketing activities (including cooperating with our marketing partners) and for other
business use.
Click "here" to read our Cookie Policy.
By clicking "Accept" you agree to the use of cookies. Read less
What is a Consumer Debtor? A Comprehensive Legal Overview
Definition & Meaning
A consumer debtor is an individual who owes money primarily for personal, family, or household purposes. In the context of bankruptcy law, this term refers to a debtor whose total debts fall below a specific threshold set by law. According to the California Uniform Commercial Code, a consumer debtor is defined as someone involved in a consumer transaction, which typically includes purchases made for personal use rather than for business or investment purposes.
Table of content
Legal Use & context
The term "consumer debtor" is commonly used in bankruptcy law, particularly in Chapter 7 and Chapter 13 bankruptcy filings. It is important for individuals seeking debt relief to understand their classification as consumer debtors, as it can affect their eligibility for certain types of bankruptcy relief. Consumer debtors often have access to legal forms and templates that can assist them in filing for bankruptcy without the need for extensive legal representation.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: Jane, a consumer debtor, has accumulated $30,000 in credit card debt and personal loans for her family's living expenses. She is eligible to file for Chapter 7 bankruptcy.
Example 2: John, who has $15,000 in medical bills and a car loan, qualifies as a consumer debtor and decides to file for Chapter 13 bankruptcy to create a repayment plan. (hypothetical example)
Relevant laws & statutes
In the context of consumer debtors, several key laws apply:
Bankruptcy Code (Title 11 of the United States Code) - outlines the procedures and eligibility for bankruptcy filings.
California Uniform Commercial Code § 9102(a)(22) - defines a consumer debtor in the state of California.
State-by-state differences
Examples of state differences (not exhaustive):
State
Consumer Debt Threshold
Notes
California
$2,750
Defined under state law for consumer transactions.
New York
$3,000
Consumer debt limit varies based on the type of bankruptcy.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Difference
Debtor
Any individual or entity that owes money.
A consumer debtor specifically owes money for personal use.
Business Debtor
An entity that owes money primarily for business-related expenses.
Consumer debtors focus on personal debts, while business debtors focus on commercial debts.
Common misunderstandings
What to do if this term applies to you
If you identify as a consumer debtor and are considering bankruptcy, here are steps to take:
Assess your total debts and determine if they qualify under the consumer debtor definition.
Explore US Legal Forms for ready-to-use legal templates that can guide you through the bankruptcy filing process.
If your situation is complex, consider consulting a legal professional for personalized advice.
Find the legal form that fits your case
Browse our library of 85,000+ state-specific legal templates.
A consumer debtor is defined by having debts primarily for personal, family, or household purposes, and their total debts must fall below a specific legal threshold.
Yes, consumer debtors can file for bankruptcy, typically under Chapter 7 or Chapter 13, depending on their financial situation.
Assess your debts, consider your options for bankruptcy, and explore legal forms that can assist you in the filing process.