You are not alone in wondering what the term “executory contracts” means, as it is seldom used in any other area of the law outside the bankruptcy code.
Fortunately, the answer is really not too complicated — an executory contract is one where one (or both) of the parties have not competed their obligations.
The best example is a lease. Until the lease runs out, it’s an executory contract, because the landlord still has to provide access to the leased property.
Schedule G becomes very useful for debtors who are filing bankruptcy cases where they want or need to get out of a burdensome apartment lease. Whether it’s a vermin filled unit or just a too high rent you can’t afford anymore, listing the lease on schedule G will allow you to break it as part of a typical Chapter 7 bankruptcy.
This comes in handy in this area, where many people in areas like Haverhill, Methuen or Lawrence have leases in two or three family houses that they would like to terminate.
The form itself is simple to fill out: name and address of the landlord, along with the terms of the lease are what must be declared.
Schedule G isn’t limited to housing leases, though. Consumers who have rent-to-own contracts, book club deals, cell phone contracts that have gotten out of hand, or fitness club memberships that they no longer use can all take advantage of Schedule G to shed themselves of these burdens when they file for bankruptcy. Car leases too.
If you live in the Merrimack Valley and have any of these contracts and are thinking about filing for bankruptcy, let your bankruptcy lawyer know about them, and chances are you can get rid of more problems than you expected if you decide to file a Chapter 7 or Chapter 13 bankruptcy case.
By Doug Beaton