When you file for chapter 7 bankruptcy, you must fill out several forms called “schedules,” on which you’ll provide information about your property, debts, etc. The following is a brief discussion of each schedule and what kind of information it calls for. For more information about the other parts of the petition, see our article on the bankruptcy petition.
In Schedule A, you will disclose any ownership interest in real property you may have. This will include a home, condo, land, or other type of real estate owned by you. When filling out Schedule A, provide the location and a description of the property, the value of your interest in the property, as well as the amount of secured claims (like a mortgage or liens) which might encumber the property at the time of filing.
Schedule B requires that you list the entirety of your personal property, which is property you own aside from real estate. This will include such assets as bank accounts, household goods like furniture, vehicles, clothing, cash, insurance policies, musical instruments, valuable collectibles, stocks, bonds and annuities, and any other valuable property.
Contained in Schedule B is a thorough list of which types of assets must be disclosed on this form. You must be sure to include the entirety of your personal property, even the things you suspect are not worth much. If you purposely fail to list an asset, your discharge might be denied, and you could even end up facing criminal charges for fraud.
In assessing the value of your personal property for the purposes of filling out Schedule B, use the replacement value of property- how much would it cost you to buy the same item in the same age and condition? You might need to determine what a retailer would charge for such an item. The rule of thumb is that clients should use garage sale or yard sale value when determining value for personal property; certain things like vehicles however can use standard measures of value like Kelly Blue Book or NADA.
A quick note on valuing real estate: we tell our clients to ask a realtor or real estate agent to do a comparative market analysis on the home. We feel that a comparative market analysis is a better representation of a home price than a listing on a website such as Zillow.
Chapter 7 bankruptcy is often called “liquidation bankruptcy,” because when you file for Chapter 7, the bankruptcy trustee assigned to your case retains the authority to sell any of your assets which are not exempt in order to repay your debts to creditors. If an asset is exempt though, it will be safe from liquidation.
Which kinds of property qualify as exempt varies from state to state, and at the federal level. Therefore, the types and amount of property you’ll be entitled to keep will depend on the bankruptcy exemption laws of the state in which you file. See our article about New Mexico bankruptcy exemptions for more information.
No matter the state, on Schedule C is where you must list and claim an exemptions for every asset included in your petition. Arguably, this is perhaps one of the most important forms included in your petition for bankruptcy. To fill out Schedule C properly and thoroughly, you’ll need to determine which bankruptcy exemptions apply to you, and do thorough research on each one. If you’re not sure about whether a certain piece of your property is truly exempt, consult with a qualified Albuquerque bankruptcy attorney or a bankruptcy attorney familiar with exemption laws within your jurisdiction.
If you took out a loan and pledged property as security, that creditor has a secured claim against you. If you do not repay this loan, the creditor generally has a right to repossess the property through using foreclosure or typical repossession methods. A mortgage or car loan is the most common type of secured loan, and if you default on these, the creditor can take back possession of your care or home. You have the ability to indicate whether you would like to keep your secured obligation and therefore the collateral associated with it; this process is called reaffirmation.
On Schedule D, you will list any secured claims which might encumber any of your property- this is not limited to your home or vehicle. When filling out Schedule D, you must provide the creditor’s name, contact information, the amount of lien against your property, the nature of the lien, the date on which the debt was incurred, and a description and valuation of the property against which the creditor has a lien. If the amount of the lien is larger than the property’s value, you must also provide the difference in the column labeled “unsecured portion.”
Some kinds of debt cannot be discharged when you file for bankruptcy. These debts are called priority claims. Certain taxes (see our article on determining whether tax debt is dischargeable in bankruptcy) and spousal or child support, for example, qualify as priority claims. These debts must be listed in Schedule E.
Schedule E provides instructions on what types of debt will be construed as priority claims, and must therefore be listed on the schedule. Even if you think that only a portion of the claim is truly entitled to priority status, you must nonetheless disclose the entire amount of the claim, though you can still specify the amount which is not entitled to priority in the column provided.
In Schedule F, you will provide a list of any general unsecured debts in your name. This will include credit cards, personal loans, student loans, medical bills, as well as other debts that do not qualify for listing on Schedule D or Schedule E.
Schedule F requires that you disclose each and every debt you may have in your bankruptcy schedules, even if you plan to repay them after filing; this includes creditors such as family members. If you omit a debt from the schedules, it might not get discharged in bankruptcy, which defeats the purpose of the entire process. This means that you must carefully review each and every single one of your debts in order to ensure that they are all included. Generally, it is a good idea to get a copy of your credit report, and use it as a comparison against your bankruptcy schedules so that nothing is overlooked.
If your property has been repossessed or foreclosed on by a secured lender, the lender will usually sell the property at auction to satisfy the debt. If this happens and the amount paid at auction is insufficient to cover the amount owed on the property, you might still need to cover the difference. Your being held liable will depend on the deficiency laws in your state, and the type of property in question. If there is a balance remaining after auction, that balance would need to be listed on Schedule F as well, as it is no longer considered a secured debt.
These are any contracts which you have entered into with a lender, under which both you and the lender are still obligated. Some usual examples of these contracts, which will need to be listed on Schedule G, are:
Once you’ve filed for bankruptcy, any rights you had under one of these contracts will become the property of your bankruptcy estate. Your bankruptcy trustee will then have the authority to take over your contract or lease, if doing so will generate money to repay your creditors. However, unless you’re paying rates below the market, or unless the bankruptcy trustee could otherwise turn a profit from taking over the contract, the trustee won’t assume it.
If you do in fact have any co-debtors with you on any of your outstanding debts, you will need to list them on Schedule H. However, you should remember that a bankruptcy discharge will eliminate liability for only your individual debt. It will not do the same for the debts of your co-debtor(s). Thus, your creditors can still pursue a claim against your co-debtor once you’ve filed for bankruptcy.
When filing for Chapter 7 bankruptcy, you are required to inform the bankruptcy court as to your approximate budget per month. You will provide details on your marital status, your dependents (if any), your employment information if applicable, and your current income. You must be sure to follow the instructions on the schedule, and list your income from every source on its appropriate line. You should also remember that if you have a spouse but you are filing for bankruptcy individually, you must still include information on the income of your spouse on this Schedule.
Schedule J is somewhat similar to Schedule I. The two Schedules work in concert to inform the bankruptcy court as to your approximate monthly budget. On Schedule J, you will include details about each of your monthly expenses. This amount will then be subtracted from the amount of net income provided on Schedule I, and will then determine what amount of disposable income you’ll have every month.
You will only have qualified for Chapter 7 bankruptcy in the first place if you have passed the “means test”, were not required to take the means tests, or were below the median income for your state and household size. Even if you do technically qualify for Chapter 7 bankruptcy, a bankruptcy court might nonetheless find that you are ineligible for filing for Chapter 7 bankruptcy if your budget allows for a considerable amount of disposable income every month.
Finally, once you have completed each Schedule discussed above, you will need to summarize them all. The totals listed on each form will need to be summarized on the Summary of Schedules form, which gives the bankruptcy court and the bankruptcy trustee assigned to your case an overall understanding of your financial situation.