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We enter the halfway point in the six-part series on “How to Prepare a Consumer Chapter 7 Bankruptcy without a Nebraska Bankruptcy Attorney”.
The first article dealt with completing the Means Test, a crucial step in determining whether you can proceed with Chapter 7 Bankruptcy.
The second article focused on finding your creditors and properly listing them on the Chapter 7 Bankruptcy Petition.
This article will provide the information needed to complete Bankruptcy Schedules A, B, and C. The property listing section of the Bankruptcy.
When Listing your Property on Your Petition, Be Truthful and Descriptive
If you are an avid reader of this site, you know that a Chapter 7 Bankruptcy is used to liquidate your property in exchange for eliminating your debt. So it only makes sense that a debtor would be required to list their property so that a bankruptcy trustee can liquidate it.
Why can’t I just not list that I have property?
Bad idea!
The first reason is that failing to list your property is an act of perjury and bankruptcy fraud. You sign and file the bankruptcy schedules and petition under penalty of perjury.
The second reason is that if you fail to list all of your property, your bankruptcy discharge may not be granted.
Be truthful and list all of the property you own and be specific when describing the property.
!WARNING!
I’ve sat through hundreds, if not thousands, of Creditor Meetings. For whatever reason, Do-It-Yourself Debtors (those who decide not to hire an attorney), get really tripped up with filling out Bankruptcy Schedules A, B, and C.
Do-It-Yourselfers fail to list common items of property in their schedules. Clothes, bank account balances, potential inheritances, child support arrears. It gets nasty because the bankruptcy trustee is thinking, “If the debtor doesn’t even list that they own clothing, what else are they hiding?”
Schedule A: Real Property
Completing Bankruptcy Schedule A isn’t too difficult. If you own a house, building, or land, you describe the property and provide its value. Simple.
Schedule B: Personal Property
Most Do-It-Yourself-ers get mixed up on Bankruptcy Schedule B. This bankruptcy schedule lists out a variety of different categories of property. If you own property in that particular category, describe it in detail.
How detailed?
I tend to want to give the bankruptcy trustee as much information as he or she would want to know about an item. It takes away the potential for the trustee to ask in-depth questions at the Meeting of Creditors. I don’t want my client there any longer than he or she has to be. For vehicles, I provide the year, make, model, condition, and mileage. For bank accounts, I state which bank, type of account, and the last 4 digits of the account.
Common Mistakes when filling out Schedule B
Don’t make mistakes on Bankruptcy Schedule B. You don’t want the court or bankruptcy trustee questioning you. We have already mentioned failing to list clothing, but here are some other common mistakes.
- I hear all the time that my client “doesn’t want to file bankruptcy on our cars”. If you own a car, you need to list it on Schedule B. Whether you get to keep it will be discussed later.
- Do you have wedding rings? Other jewelry? List it! I’ve seen countless times Do-It-Yourself-ers not include wedding rings on Bankruptcy Schedule B, but where them to the Meeting of Creditors! The bankruptcy trustee then questions them about it, and continues grilling about other topics because of the failure to include rings.
- If you don’t think something has any value, you still include it. To you it may not hold any value, but the trustee might be able to find someone willing to pay something for it.
- Ever own a business that didn’t even get off the ground? Yep, list it.
- Recent car accident? You may have a claim against the other driver. It is property that needs to be listed.
- Former spouse behind on alimony or spousal support? It’s property too.
- A common question I get is, “I’m on the paperwork for a (car, bank account, whatever) that belongs to my (friend, child, relative). Do I include it as property? Yep, you jointly own it.
- Own property that doesn’t seem to fit any of the listed categories? Still list it. Bankruptcy Schedule B provides an “Other Property” category just for this purpose.
Schedule C: Property Claimed As Exempt
You should know from reading this site that in a Chapter 7 Bankruptcy, a debtor is able to exempt certain property so that a trustee is unable to claim it and sell it. I’ve discussed exemptions before and won’t go into detail here.
Determining exemptions is probably the most important aspect of the entire Chapter 7 Bankruptcy Petition process. It requires a knowledge of available exemptions and how they are properly applied. As such, I would not recommend figuring it out without the help of a knowledgeable Nebraska Bankruptcy Attorney. If you feel overwhelmed by trying to figure out exemption laws, contact me and schedule an appointment. I can help resolve your fears and get you on track toward a debt free future.
The next article in the series will deal with a debtor’s income and expense figures.