How to List Personal Items for Bankruptcy
According to Section 521(a)(1)(b)(i) of the United States Bankruptcy Code, every person who files bankruptcy must disclose all property and assets. Debtors must disclose real estate, vehicles and personal items. The definition of property also includes intangible rights. Disclose all personal items and valuable rights you intend to keep. The official form required by the court is available online. Accuracy is essential because trustees may require surrender of omitted assets.
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Things You'll Need
- Official schedule of assets and liabilities form
- Value estimates
- Property exemption statutes
Instructions
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Completing the Form
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1
Review property. Focus on important property you intend to keep. Collect statements for exempt retirement accounts, IRAs, 401(k)s, insurance policies with cash surrender value, and all valuable accounts. Household possessions rarely interest trustees and creditors because of their market value.
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2
Exclude property. Do not include property you do not own even when under your control. For example, exclude property owned by a relative who may live with you and gifts you made to children.
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3
Obtain the schedule of assets and liabilities form. Free forms are available from the clerk of each bankruptcy court. All bankruptcy courts also maintain websites and offer free downloads of all official forms.
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4
Prepare the form. Use categories to lump property together. For example, you may use kitchen utensils, clothes and jewelry as categories. List your important property separately.
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5
Provide a description. Many categories covering ordinary assets do not require an explanation. For important property, list each asset separately and provide a detailed description.
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6
Estimate value. The court requires a net market value estimate for all personal items. Courts use these estimates to determine compliance with property exemption limits.
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Include exemptions. Cite statutory authority to claim a state or federal exemption for each asset you intend to keep. The net market value of an asset must be less than the exemption limit to avoid forfeiture.
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8
Disclose liens. List all property separately that is subject to a lien. Identify the lender, loan amount, and provide a full description of the collateral.
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9
Declare intentions. Explain your intent to either keep or surrender all personal items included within the official form.
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10
File the official form. Property disclosures and exemptions become effective when the clerk of the court files the official form.
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Tips & Warnings
Trustees focus on important property and valuable assets. They seize non-exempt assets if their liquidation value covers the cost of seizure and the cost of providing a proportional distribution of their proceeds to creditors. Seizure, liquidation and distribution require significant time and attorney fees. Trustees abandon the right to seize low value assets even though an exemption does not apply. Use garage sale prices when estimating current market value. Market value is the price available to you without incurring advertising costs.
