Schedules E and F are part of the same form, entitled Schedules E/F, because the claims are unsecured, meaning no collateral exists. Schedule E/F has two parts, Part 1, for unsecured claims entitled to priority; and Part 2, for all other unsecured claims. Today we’ll talk only about Part 1, those unsecured claims entitled to priority.
What does “priority” mean?
As used in the Bankruptcy Code, a priority claim is one that is entitled to priority in being paid. The Bankruptcy Code lists 10 different types of priority claims, and those claims have priority among themselves according to the order in which they are listed. Claims of the first class are paid before claims of the second, and so forth. All 10 classes of priority claims must be paid in full before any general, unsecured creditors listed on Schedule F receive any payments.
What claims are priority claims?
Many of the 10 classes of priority claims are not applicable to individual debtors. For example, claims up to $10,000 per employee for unpaid wages; claims for customs duties owed for the importation of goods; and claims for contributions to employee benefit plans all are priority claims but most individual debtors, especially those filing without an attorney, will not have claims of these types. Priority claims that individuals might have include
• Domestic support obligations
• Claims for unpaid taxes due to any taxing authority
• Claims for death or personal injury caused by the debtor driving while intoxicated
How to complete Schedule E
Schedule E is much like Schedule D in its layout. There are four columns for each claim. The first column is to identify the creditor and who owes the claim. Once again, it’s imperative to have the correct name and address of the creditor so it gets notified of the bankruptcy. Below that, indicate who is liable for the claim. Below that, the form asks if the claim is subject to offset. An offset occurs where the creditor owes the debtor money. For example, suppose the debtor owes $10,000 in back taxes, but in the year the debtor files she is entitled to a $2,500 tax refund. The taxing entity owes the debtor and that can be offset against the money the debtor owes the taxing entity, resulting in a net claim of $7,500.
The next column is to further identify the creditor by giving the last four digits of the account number the creditor uses; the year the claim was incurred; and, as with secured claims, whether the claim is contingent, unliquidated or disputed. Finally, in column 2 the debtor designates the type of priority.
The last column is to break down the total claim into the portion entitled to priority and the portion that is not a priority claim, if any.