How to fill out Schedule C of a bankruptcy petition

In many ways, Schedule C is the heart and soul of an individual or couple’s bankruptcy petition. That is because it is here that a debtor declares the exemptions that apply to their property, and it is the exemptions that determine what property a debtor will keep after the filing, which in turn determines the debtor’s quality of life after their “fresh start.”

The form is simplicity itself. The property listed on schedules A (real estate) and B (personal property) is repeated here on the left hand column. In the right hand column the value of the property is listed, and next to it the value of the claimed exemption.

The middle column, though is the key part to Schedule C: where you “specify the law providing each exemption.” This is where a bankruptcy lawyer earns his keep, by knowing which of the exemptions apply to each type of property.

At the top of schedule C, you will notice there are two check boxes for electing exemptions. The box for 11 USC 522(b)(2) is for debtors using the federal exemption scheme; the box marked 11 USC 522(b)(3) is for debtors who are choosing to use their state exemption laws instead. Some states don’t allow debtors to use the federal exemptions, and force their residents to only use the local list; here in both Massachusetts and New Hampshire we are lucky as both states allow individuals freedom of choice when filing a bankruptcy case.

There is one more check box at the top of Schedule C, with the cryptic invitation to check it if the debtor is claiming a homestead exemption greater than $146,450. That figure comes into play in cases where homeowners have moved across state lines in the past two years; if so, they must use the homestead exemption of their previous residence, and it can’t exceed the stated amount.


By Doug Beaton

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