This week we cover Official Form 106A/B, commonly called Schedules A and B. These two schedules list all of your property. Schedule A covers real property, which is land, including houses, rental homes, vacant land, vacation property and any other form of real estate. Schedule B covers personal property, which is everything that isn’t land.
Before beginning, remember to have a copy of Schedules A/B for reference. You can get a copy here.
Part 1: Part 1 of Schedule A/B is for land. Give the address or other description of the land, indicate what type of property it is and give its value. Most people use the latest tax assessed value; however, if there are recent sales of similar property in the area, those sales prices are acceptable. The next question is “current value of the portion you own.” If you own the property solely in your name, this is the same as the current value. If you are husband and wife filing jointly, and you own the property together 100%, again it is the current value. But if you own the property with others, including a spouse, who are not filing bankruptcy, then this amount is the percentage of the value that you own of the property. For example if you are married but your spouse isn’t filing and if you each own equal parts of the property, then the current value of the portion you own would be 50% of the current value of the entire property.
Part 2: Part 2 of Schedule A/B is personal property. For “vehicles,” give the requested information regarding the make, model, year, mileage and any other information that may affect the value, such as “needs new tires,” “transmission slips,” “won’t pass inspection,” or the like. Once again, indicate whether anyone else has an interest in the vehicle and give the current value and the current value of the portion that you own.
When it comes to household items such as furniture, TVs, beds, silverware, etc., value the property based on what you think you could get for it at a yard sale. In most cases, this will be fairly minimal. Most household items are exempt, meaning the trustee cannot seize and sell them. We’ll cover exemptions in the next post.
Financial assets should be listed at current value. “Cash” means cash on hand, not checking or savings deposit. Know that any form of money, whether it is cash or a deposit account, is ordinarily subject to being taken by your trustee. So if you file right after payday, you could lose that paycheck. The trustee will ask for a bank statement that shows the balance in all your bank accounts as of the day you filed. Whatever is there is subject to being taken; however, if the amount is under $200, ordinarily the trustee will abandon his claim to the money. Remember this means cash as well, so simply withdrawing the money and holding it as cash before you file will not protect it.
Tax refunds are also subject to seizure by the trustee. The trustee is entitled to a portion of your current year’s tax refund based on when you file bankruptcy. At this time of year (late winter) lots of people are preparing their taxes. If you are entitled to a refund for 2016 and file bankruptcy before you receive the refund, the trustee can take it. Even if you’ve received your refund but haven’t spent it yet the trustee can take it. If you file after receiving and spending your prior year’s refund, the trustee is still entitled to a portion of your 2017 refund when it comes. If you file on June 30, for example, the trustee will be entitled to approximately one-half of your 2017 refund when it comes in 2018. If you file on September 30, he would be entitled to approximately three-fourths of your 2017 refund.
Any interests that you have in businesses must be listed and valued. It becomes difficult to value a partial interest in a closely held business but you are required to make your best effort to give a value to any such interests. If you own stock in a company and that stock is publicly traded, the value would be the value on the date of filing.
When you have completed all sections of Parts 1 and 2 of Schedule A/B, total all the values and enter that number of line 63. You have now completed Official Form 106A/B.
If you find you need help completing your bankruptcy filing, please contact us.