Now that you’ve listed all your property on Schedules A/B and claimed all your exemptions on Schedule C, it’s time to move on to listing your creditors. Creditors are divided into three classes: secured (Schedule D), priority (Schedule E) and unsecured (Schedule F). Today we’ll address Schedule D. Be sure to download a copy of Schedule D here. Officially, it is Form 106D, but everyone calls it Schedule D.
Secured debts are those debts that are secured by some of your property, meaning, you have signed an agreement giving the creditor a security interest or lien in the property. If you default on the obligation, the creditor is entitled to repossess the property (if it’s personal property) or foreclose on it (if it’s land). Examples of secured debt are car or vehicle loans, home loans, and any debt through an in-house credit card. For example, if you have a Best Buy, Sears, J.C. Penny, Lowe’s, Home Depot, R.C. Willey or similar credit card, the agreement you signed with any of those businesses probably provides that anything you purchase with the card is subject to a security interest until the full balance is paid off. Credit cards such as VISA, MasterCard, Discover, and American Express are not secured by what you purchase using the card. Those debts are unsecured claims and go on Schedule F. Additionally, anything you purchase under an agreement of any sort with the seller is subject to what is called a purchase money security interest (PMSI) and is secured.
Schedule D has three columns. In the first, list the creditor’s name and address. Below that, indicate who owes the debt, Debtor 1, Debtor 2, Debtor 1 and 2 (if the debtors are married and jointly signed) or at least one of the debtors and another party. This last category would apply if you have a co-signer other than your spouse, for example a friend or relative. Finally, give the date (year only) the debt was incurred.
In column 2, describe the property that secures the debt. The property will have already been listed on either Schedule A or B, so give the same description so the trustee can identify which of your property is encumbered by which debts. WARNING: If you are a co-signer with someone who has pledge his property, that is not a secured debt as far as you are concerned. Secured debt means debt secured by your property, not someone else’s. In such a case, the co-signed debt would be listed on Schedule F, unsecured.
Below the property description, indicate whether the debt is contingent (meaning you don’t owe it yet, but you might at some point), unliquidated (meaning the amount hasn’t been determined yet) or disputed (meaning you dispute either the amount or the existence of the debt altogether). Then indicate the nature of the lien.
The last column is subdivided into three, Columns A, B and C. Column A is to list the total amount that you owe as of the date you file. Column B is for the value of the collateral. That will be the same value that you gave when you described the property on Schedule A or B. Schedule C is the unsecured portion, which is the difference between A and B. If this number is zero or negative (the property is worth more than you owe), enter $0.
Repeat this process for each secured debt that you have. If you have any questions how to complete Schedule D or any aspect of bankruptcy, please contact us here.