Today we’re going to discuss the second schedule that lists a debtor’s property, Schedule B. This is personal property, which is anything other than real property. You can find Schedule B here.
We’ve already discussed how to value personal property. As with real property if the debtor has a partial interest, i.e., jointly owns the item with someone else, she should show the full value of the property and the value of her interest.
Part 2. Part 2 of Schedule B is motor vehicles and the like. This is straightforward: list all motor vehicles in which the debtor has an interest and give the appropriate values.
Part 3: This is household goods and furnishings. There are two schools of thought on completing the different subsections. One is to list each item under a given subsection separately. For example, under Part 3.6, Household Goods and Furnishings, the debtor would separately list each item by category, such as “two couches,” “dining room table and four chairs,” “washer and dryer,” “refrigerator,” etc., giving a value for each category. The other school of thought is simply to list one category, “household goods and furnishings” with one value for everything.
The first view is preferable because it gives a clearer picture of what the debtor owns and because it allows for the application of the various exemptions more clearly. Beds are entitled to a separate exemption from sofas. Washers and dryers are also entitled to a different exemption from clothing, for example. Listing the subcategories separately makes it clear what exemptions apply to what property.
Part 4. Financial Assets include cash on hand, which means cash in the debtor’s home, wallet, purse or somewhere other than the bank. Whatever cash on hand exists on the day of filing should be listed. Part 4.17, Deposits of Money, is where all bank accounts would be listed. Whatever the balance is in those accounts on the day of filing is what is shown as the value. The trustee will ask for all bank statements that show the day of filing. Because money in bank accounts is generally not exempt, whatever cash or balances in deposit accounts exists on the filing date is subject to being taken by the trustee. For this reason, it’s best to time the filing to coincide with when the account balance is typically its lowest, usually just before payday. If your bank statement shows a large withdrawal just before filing, the trustee will want to know where that money went and what it was used for.
Part 4.18 is for any investment accounts for publicly traded stocks or bonds. They are generally not exempt and are subject to the trustee.
Part 4.19 is for any business interests the debtor has. Please see this post on how to value them.
Part 4.21 is retirement or pension accounts. These are fully exempt if they are qualified retirement accounts, such as IRAs, 401(k) or similar accounts, pension or other like accounts.
Part 4.22. Annuities might be exempt if they are from a pension or other qualified retirement account.
Part 4.32 is for inheritances and trusts of which the debtor is a beneficiary. These can get complicated. If a debtor has an interest in an inheritance or trust, she should seek legal advice. The interest could be at risk. Simply being named in a will is not a property interest as long as the maker of the will is still alive.
Part 4.33 and 4.34. These sections are for claims against others. Suppose the debtor was involved in an automobile accident and it’s the other party’s fault. If the debtor believes she has any type of claim against the other party, that claim must be listed. Failure to list the claim might result in the debtor’s not being able to make the claim in the future.
Part 5 relates to business-related property that the debtor owns. If the debtor is self-employed, operates as a sole proprietor, and owns any business property such as desks, office equipment, tools, machinery, or the like, it is listed here. If the debtor has incorporated or formed a limited liability company (LLC), that entity might own the business-related property, in which case the debtor would not list the property here. Instead she would list it as part of the valuation of the business itself.
Part 6 is farm and commercial fishing property. The same rules apply here as with business-related property in Part 5.
Part 7 is a catch-all section. If the debtor owns anything that wasn’t listed above, it should be listed here.