Schedule G, Executory Contracts and Unexpired Leases; and Schedule H, Codebtors, often are left blank because there aren’t any. We’re going to talk about both today since they are relatively easy. The trick is knowing what executory contracts or unexpired leases are, and who are codebtors.
Executory Contracts. An executory contract is one that hasn’t been completely performed by both parties yet. An example of an executory contract is, suppose you have an agreement with a painter to paint your house. Before he starts painting, the contract is executory, because both sides still have duties to perform. He must paint the house; you must pay him for doing it. Once he finishes painting, there is nothing left for him to do, so the contract is no longer executory. A contract where all that remains is for someone to pay another person money isn’t an executory contract.
The reason executory contracts must be scheduled is that if a third party (the painter) is obligated to the debtor in some way, that obligation is an asset that the trustee could potentially sell. The right to have someone else do or give something of value to the debtor is what’s important.
Unexpired Leases. Unexpired leases are similar to executory contracts. The right to occupy real property for a period might be valuable to the trustee, especially if rental rates are going up. Suppose the debtor has a lease in an office building that still has five years to run. Suppose further that in the time since the debtor rented the space, rental rates have shot up. The bankruptcy trustee might be able to find another tenant willing to pay the trustee for the right to take over the debtor’s lease.
Completing Schedule G. Schedule G is simple. All that’s required is to give the name and address of the other party to the executory contract or unexpired lease, and a brief description of what the contract or lease is for.
What are codebtors? A codebtor is anyone who is obligated with the debtor on any of the debtor’s obligations. Recall that on Schedules D, E and F you were asked who owes the debt, and were instructed to indicate whether the debt is owed by the debtor alone, the debtor and her spouse, or the debtor and a third party. Schedule H is where the debtor identifies anyone else who is obligated with her.
If the debtor is filing jointly with her spouse, there is no need to list the spouse on Schedule H. However, if the debtor is filing separately and her spouse is obligated on any of her debts, the spouse must be listed on Schedule H.
Likewise, if there is a third party who is obligated, that person must be listed. This includes co-signers on loans, guarantors on debts, or anyone else who might also be responsible for a particular debt.
Completing Schedule H. Schedule H has three parts. The first is whether or not there are codebtors. If there are no codebtors, mark the box “No” and answer the question in Part 2; then go on to Schedule I. If there are codebtors, mark the box “Yes” and complete Schedule H.
Part 3 asks for information about the codebtors and the debts that they are obligated on. Column 1 is to identify the codebtor by giving the person’s name and address. Column 2 is to identify the debt by indicating which Schedule, D, E or F, the debt is listed on, and which line. That way the trustee can quickly reference the debt with the codebtor.
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