Free Bankruptcy Worksheet

Provide the requested information concerning any person (other than a spouse in a joint bankruptcy case) who is also liable to pay any of the debts that have been listed in this worksheet. You should include guarantors, co-signers, and your spouse if you are filing individually. List all of the names that your co-debtors may have used during the six years before the commencement of the case.

Obviously, in a bankruptcy estate, there are more debts than there are assets to satisfy all of those debts. Therefore, the Bankruptcy Code has an established system for allocating the available money based on "classes" of creditors. The highest class gets paid entirely before the next class receives anything. This system continues until there is not enough money to completely satisfy a given class, then the creditors of that class share the remaining funds in proportion to the size of their claim compared to the claims of the others in that class. In general, the secured creditors (those to whom specific property has been pledged) are satisfied first; then unsecured creditors with "priority claims"; and finally the remaining unsecured creditors.

The following is a list of unsecured creditors who have priority claims over other unsecured creditors:

Wages, salaries and commissions: Employees of the debtor have a priority claim over other unsecured creditors for certain wages and other earnings up to a maximum of $4,000 per employee.

Contributions to employee benefit plans: Employee benefit plans have a priority claim over other unsecured creditors for promised employer contributions.

Deposits by individuals: If the debtor received deposits for the purchase of services or products which the debtor did not deliver or provide, then the individual making the deposit has a priority over other unsecured creditors up to the maximum amount that may be specified in the Bankruptcy Code.

Taxes: The government has priority over other unsecured creditors for certain taxes and penalties.

At the end of a Chapter 7 bankruptcy, the court "discharges" certain debts of the debtor. This prevents creditors from taking action to collect such debts from the debtor personally.

However, some discharged debts may still be attached to the debtor's property. The connection between the debt and the property is called a lien. The discharge of the debt does not remove liens.

For example, suppose that a bank had a security interest in the debtor's car and the debtor kept his car during the bankruptcy because it was exempt under state law. After the debt is discharged, the bank still has a security interest in the car. If the debtor fails to make the necessary payments, the bank cannot get a judgment against the individual debtor (in other words, the bank cannot touch the debtor's other assets); however, the bank can take action to repossess the car.

You must describe all "executory contracts" of any nature and all unexpired leases of real or personal property. An executory contract is a contract that has not been finished. For example, someone may have paid you for a service you have not yet performed.

Likewise, an unexpired lease is one in which the debtor either owes more rent money or is owed more rent money. You must state the nature of your interest in the contract or lease. For example, you may be a purchaser or seller in a contract, or a landlord or tenant in a lease.

For each contract or lease, it is important to provide the name and mailing address of all other parties to the lease or contract so that those parties can be notified of the bankruptcy.

In a Chapter 7 bankruptcy case, the debtor's nonexempt property is taken by the bankruptcy trustee and sold to satisfy the claims of the creditors. Under applicable state and federal law, some of your personal property is exempt. Generally, these are assets that are necessary for you and your dependents to be able to live and work. The bankruptcy trustee cannot take exempt property. Some states follow the list of exempt property categories that is provided in the United States Bankruptcy Code. However, most states have their own list of exempt property, and if so, the state's list controls. In order to determine which items of your property are exempt from being taken by the bankruptcy trustee, it will be necessary for you to consult an attorney who is well versed in your state's exemption laws.

By filling out the details requested in this bankruptcy worksheet, you can provide your attorney with a ready source of information with which your attorney can make an assessment of your exemptions. This worksheet will also permit your attorney to assist you in planning your bankruptcy to minimize your nonexempt assets. Please note that there are strict limitations on certain kinds of transfers made just prior to bankruptcy. These limitations are intended to prevent preferential treatment for some creditors and to prevent transfers intended to defraud creditors. However your attorney will be aware of these restrictions and can assist you within the bounds of the law.

You must provide the bankruptcy trustee with detailed information regarding your income and expenditures. If you have a business or farm, you must also supply this information for the business or farm. A good source for that information is the schedule that you filed with your income tax return.

The type of debt may affect the debtor's choice of bankruptcy code chapter under which to file. For example, individuals with consumer debt (as opposed to business debt) who wish to file for rehabilitative relief (restructuring the debt) rather than liquidation (selling all non-exempt assets), may file under Chapter 13. Individuals with farm debt who want rehabilitative relief may file under Chapter 12. The nature of the debt may also affect other rules during the course of the bankruptcy. For example, if the debts are primarily consumer debts, the bankruptcy clerk must give the debtor written notice that describes each chapter of the bankruptcy code under which the individual may file.

A non dischargeable debt is one that cannot be discharged under any form of bankruptcy. That is, the debtor still has to pay the creditor for the non-dischargeable debt, even after bankruptcy. In this way, the Bankruptcy Code reflects society's decision that certain debts are so important or so serious that the debtor should never expect to escape them, and therefore should exercise caution in incurring these debts.

The list of non-dischargeable debts provided in this bankruptcy worksheet is not meant to be exhaustive, but it does provide an idea of the types of debts that are not dischargeable in bankruptcy.

TAXES: Taxes are non-dischargeable if they became due less than 3 years ago, or no return was filed, or the return was not filed on time, or the debtor made a fraudulent return, or the debtor attempted to evade or defeat such taxes.

FRAUD: If money, property, services, or an extension or renewal or refinancing of credit is obtained by false pretenses, that debt is non-dischargeable. False pretenses include (1) a false representation, (2) actual fraud or (3) a statement in writing that was materially false regarding the debtor's financial condition, on which the creditor reasonably relied, and which the debtor made with the intent to deceive the creditor.

CREDIT CARD RUN-UP: Consumer debts owed to a single creditor for amounts over any limits specified in the current Bankruptcy Code that were used to obtain a cash advance or purchase luxury goods or services within the specified period of filing bankruptcy are not dischargeable.

THEFT: Debts for fraud while acting in a fiduciary capacity (e.g. as a trustee, guardian or conservator), or for embezzlement or theft are non-dischargeable.

SUPPORT PAYMENTS: Alimony and child support are usually non-dischargeable.

WILLFUL INJURY: Debts for the debtor's willful injury of another person or property are non-dischargeable.

STUDENT LOANS: Debts for educational loans guaranteed by a governmental unit are non-dischargeable unless those debts are first due more than 7 years before the date of filing. The exception to this rule is if the debtor can show that not discharging the debt will impose an undue hardship on the debtor and the debtor's dependents.

DRUNK DRIVING: Debts arising out of death or personal injury caused by a drunk driver are non-dischargeable.

In bankruptcy, debtors are required to list all of their property for the bankruptcy trustee to examine. Debtors are permitted to claim that some property is "exempt" under applicable state or federal law. Most states permit debtors to claim their "homestead" as exempt property. The homestead is generally defined as the house in which the debtor lives, as well as the surrounding real estate.

Generally, exempt property is not taken from the debtor during bankruptcy. In a Chapter 7 case, only the nonexempt assets are sold for the benefit of the general creditors. However, if a secured creditor was given a security interest in specific property, the trustee can sell that property, apply the proceeds to the loan, and use any surplus to satisfy other debts. If the property is sold for less than the amount of the security interest, then the secured creditor's deficiency may be satisfied, to the extent possible, in the same way that unsecured creditors are paid. If the property is owned jointly by a co-debtor who is not declaring bankruptcy, the bankruptcy trustee may not have the authority to sell the property, but the secured creditor may also have other remedies.

Even though your home may be exempt property, bankruptcy will not prevent your home mortgage lender from foreclosing on the mortgage if you are unable to make the required mortgage payments. While bankruptcy might delay the foreclosure process, it does not void the properly filed mortgage.

Determining whether particular property is exempt is a matter that will require the advice of an attorney who is well versed in your state's exemption law.

A secured creditor is someone who loans money on the condition that failure to repay the loan gives the creditor the right to take and sell the property that serves as the security for the loan (commonly known as "collateral"). Therefore, a secured creditor's rights to that property are generally greater than the rights of unsecured creditors.

A security interest in your property can be created either voluntarily or involuntarily. A voluntary security interest is created when a debtor signs a document that a creditor then may file with the state. For example, if you borrow money for the purchase of a car, the bank will require that you grant the bank a security interest in your car. When a bank loans money to a small business for operating expenses, the debtor usually gives the bank a security interest in the equipment and inventory of that business. When a bank provides a loan for the purchase of a house, the debtor signs a "mortgage" which gives the bank a security interest in the home.

An involuntary security interest arises by force of law when a creditor gets a court judgment against the debtor, and then converts that judgment into a lien against the debtor's property. For example, if a plaintiff in a personal injury lawsuit receives a judgment against the debtor, the judgment can become a lien on the debtor's property.

If you file bankruptcy, you will be required to provide a detailed list of all secured creditors. This will include account numbers as well as the amount owed to each creditor. In many cases, the value of the property that serves as security for the loan will be greater than the balance owed on the loan. In that case, if the property is sold at its market value, the secured creditor is repaid and the bankruptcy estate is entitled to the surplus. The surplus will be available for the unsecured creditors. Conversely, if the property sells for less than the amount of the outstanding balance of the loan, any remaining debt may be discharged when the estate is closed.

1. The Bankruptcy Worksheet is not a legal document and does not require any signatures, witnesses or notarization.

2. The Worksheet can be used to organize the information needed to file for bankruptcy.

There are several forms of bankruptcy relief. One form is known as liquidation. Liquidation refers to Chapter 7 of the United States Bankruptcy Code. In a Chapter 7 bankruptcy case, the bankruptcy trustee collects the debtor's non-exempt property and converts it to cash to distribute to creditors in accordance with certain priorities set by the Bankruptcy Code. At the time of filing the Chapter 7 bankruptcy petition, the debtor gives up all rights to the debtor's non-exempt property with the hope of receiving a discharge. A discharge releases the debtor from any remaining personal liability for the debtor's pre-bankruptcy debts. Not every Chapter 7 bankruptcy case results in a discharge. Further, even if a debtor is able to obtain a discharge, the debtor will not necessarily be discharged from all types of creditor's claims. You are encouraged to consult with a lawyer regarding exceptions to discharge and grounds for withholding a discharge.

Rehabilitation is another form of bankruptcy. Chapters 11, 12 and 13 of the Bankruptcy Code deal with rehabilitation. In a rehabilitation case, creditors look for repayment from the debtor's future earnings rather than the debtor's non-exempt property at the time the bankruptcy petition is filed. Under these chapters, the debtor retains his/her property and makes payments to creditors pursuant to a court-approved plan. These payments to creditors are usually made from earnings of the debtor after the bankruptcy has been filed.

Chapter 11 is primarily used for the reorganization of a business, but it is also available to individuals. Filing under Chapter 11 is quite complicated.

Chapter 13 can only be used by individuals with regular income who want to pay their debts in installments over a period of time. You can only file under Chapter 13 if your debts do not exceed certain dollar amounts set forth in the Bankruptcy Code.

Chapter 12 may be available to debtors with regular income from farming operations. Like Chapter 13, you can only file under Chapter 12 if your debts do not exceed certain dollar amounts set forth in the Bankruptcy Code.

Eligibility under the bankruptcy code for businesses sometimes depends upon the type of business operations. For example, the United States Bankruptcy Code provides that railroads, banks and insurance companies cannot file a "Chapter 7" bankruptcy. A partnership can only file for voluntary bankruptcy if all of the general partners join in. The form of business may also affect general administrative rules and procedures during the course of the bankruptcy.

The type of debtor you are may affect the type of bankruptcy you file. If you are contemplating filing bankruptcy for yourself, you may file as an individual or sole proprietor. A "joint" filing may be appropriate if you and your spouse are filing together. You may also file on behalf of a partnership or limited liability company.

Obviously, in a bankruptcy estate, there are more debts than there are assets to satisfy all of those debts. Therefore, the Bankruptcy Code has an established system for allocating the available money, and this system is based on "classes" of creditors. The highest class gets paid entirely before the next class receives anything. This system continues until there is not enough money to completely satisfy a given class, then the creditors of that class share the remaining funds in proportion to the size of their claim compared to the claims of the others in that class. In general, the secured creditors (those to whom specific property has been pledged) are satisfied first; then unsecured creditors with "priority claims"; and finally the remaining unsecured creditors.

Unsecured creditors are those people or organizations to whom you owe money but who do not have recorded rights to any specific property. In other words, they have loaned money to you, or provided goods or services to you on credit, without receiving collateral in return. Include in the worksheet all of those people or organizations to whom you owe money that were not listed as secured creditors, or creditors holding unsecured, priority claims. The bankruptcy court requires that all of your creditors must be provided with notice of the bankruptcy action immediately after you file bankruptcy. Therefore it is critically important that you provide your attorney with accurate information regarding each of your creditors, including account numbers and the amount owed. Any creditor that does not receive proper notice of your bankruptcy action can still pursue you for the debt after the bankruptcy action.

Some general rules should be followed in providing values for assets. Generally, the assets should be valued at their fair market value, that is, the value that would be paid by a willing buyer to a willing seller at the present time and in its present condition. Often the fair market value of an asset will be more than its cost. For example, the fair market value of a home is often higher than its cost to the debtor.

Cash Accounts, IRA's, and Retirement Plans

Cash accounts, IRA accounts, and retirement plans should be listed at their current values. Investment accounts, stocks, and bonds should be valued at their current market value, not their original cost. Do not deduct any amount for the cost of commissions that might be required to convert these items to cash. Information regarding the values of U.S. Savings Bonds can be obtained by contacting a bank or brokerage firm.

Real Estate

Real estate may be difficult to value. However, appraisals for property tax purposes, and recent sales of similar real estate can be useful in estimating the fair market value.

Life Insurance

Life insurance policies on the debtor, which are also owned by the debtor, should be listed at the current value that would be paid if the policy was surrendered to the life insurance company (the "cash value"), not the face amount. If the debtor owns life insurance on persons other than the debtor or the debtor's spouse, only the cash value should be listed.

Business Interests

Business interests may be difficult to value, but should be at least estimated, based on the assumption that a willing buyer would pay a fair and reasonable price.

Vehicles

Cars and other vehicles can be valued using pricing books (sometimes called "blue books") that are available at car dealerships or banks. As an alternative, you can check the sales listings in your local newspaper to obtain an estimated value.

Household Furnishings

It is tempting to overvalue household furnishings and personal belongings. The value listed should be the value that such items would bring if sold as "used" items. Frequently this value is less than the cost paid to purchase them, and the value of the items to the debtor.

Debts and Liabilities

Debts and liabilities should be listed at an amount equal to the current outstanding principal amount. For example, the amount of a mortgage should be the current principal balance; credit cards should be listed at the current outstanding balance.