Chapter 7 Schedule C Preview, Official Bankruptcy Form 106C

Описание: It is vital to note that every Chapter 7 individual debtor is allowed, but not required, to file a schedule of exempt assets. A debtor’s asset exemption schedule is officially titled Official Form 106C, Schedule C: The Property You Claim as Exempt. This form is commonly known as Schedule C.

Exemptions are a powerful tool acting as a counterweight to a Chapter 7 panel trustee’s ability to seize and sell assets listed on Schedule A/B. The exemption laws may allow a debtor to retain an asset and avoid liquidation of that asset by fully exempting the asset. The exemption laws may alternatively allow a debtor to receive proceeds from the sale of a liquidated asset to the extent the asset is only partially exempt. The applicable exemption protection is either granted by Congress as codified in the Bankruptcy Code or granted by an applicable state legislature.

If an individual is filing for bankruptcy, the law may allow the debtor to keep some property, or it may entitle the debtor to part of the proceeds if the property is sold after the case is filed. Property that the law permits the debtor to keep is called exempt property. For example, exemptions may enable the debtor to keep a home, a car, clothing, and household items.

Exemptions are not automatic. For property to be considered exempt, the debtor must list the property on Schedule C. If the debtor does not list the property, the trustee may sell it and pay all of the proceeds to your creditors. The debtor may unnecessarily lose property if the debtor does not claim exemptions to which the debtor is entitled.

Determining which set of exemptions to use is difficult for people new to bankruptcy. Before the debtor fills out Schedule C, the debtor must learn which set of exemptions the debtor can use. In general, exemptions are determined on a state-by-state basis.

Some states permit the debtor to use the exemptions provided by the Bankruptcy Code. 11 U.S.C. § 522. The Bankruptcy Code provides that the debtor uses the exemptions in the law of the state where the debtor had a legal home for 730 days before you file for bankruptcy. Special rules may apply if the debtor did not have the same home state for 730 days before filing. The debtor may lose property if the debtor does not use the best set of exemptions for the situation. If the debtor’s spouse is filing jointly and they are filing in a state in which they may choose between state and federal sets of bankruptcy exemptions, both debtors both must use the same set of exemptions.

For each item of property the debtor claims as exempt, the debtor must specify the amount of the exemption claimed. Usually, a specific dollar amount is claimed as exempt, but in some circumstances, the amount of the exemption claimed might be indicated as 100% of fair market value. For example, a debtor might claim 100% of fair market value for an exemption that is unlimited in dollar amount, such as some exemptions for health aids.

The debtor must identify the laws that allow the debtor to claim the property as exempt. Be as complete and accurate as possible. If two married people are filing together, both are equally responsible for supplying correct information. Using the property you listed on Schedule A/B: Property (Official Form 106A/B) as your source, list the property that you claim as exempt. If more space is needed, fill out and attach to this page as many copies of Part 2: Additional Page as necessary. On the top of any additional pages, write your name and case number (if known).

For each item of property you claim as exempt, you must specify the amount of the exemption you claim. One way of doing so is to state a specific dollar amount as exempt. Alternatively, you may claim the full fair market value of the property being exempted up to the amount of any applicable statutory limit. Some exemptions—such as those for health aids, rights to receive certain benefits, and tax-exempt retirement funds—may be unlimited in dollar amount. However, if you claim an exemption of 100% of fair market value under a law that limits the exemption to a particular dollar amount and the value of the property is determined to exceed that amount, your exemption would be limited to the applicable statutory amount.